Days after the completion of its $2.3-billion acquisition of Ford?s Jaguar-Land Rover (JLR), Tata Motors on Friday said the company will ?explore the India market? although it sees low volumes coming out of the country.
?Like Russia and China, JLR would be exploring the Indian market also. A team will be coming to India to study the market,? Tata Motors managing director Ravi Kant told analysts during a conference call. He, however, said the company was not expecting big numbers from the two brands in India.
?As these are high priced products, we should not be putting big numbers. The market is developing and other high priced products like Mercedes and BMW are also doing well in India,? Kant said. Tata Motors just last week announced a 7% fall in net earnings in the fourth quarter of last fiscal, although its topline grew 6%. Kant has already cautioned of a tough ride for auto companies this fiscal, owing to high input costs, rising fuel prices and high interest costs on consumer loans.
Earlier this week, the company also said it has completed the acquisition of the UK luxury brands from Ford, in an all-cash transaction. It also said that the acting chief executive officer of JLR, David Smith, would be the CEO of the new business.
The Tata Motors stock was up 1.40% on the BSE on Friday to close at Rs 540.05.
Asked if JLR would be adding more capacity in view of new models like XK, XF from Jaguar and other products from Land Rover being in the pipeline, and whether it plans to enter new markets, Smith, who joined Kant in the concall, replied in the negative.
?Our capacity has been realigned but we do not expect additional capacity requirement,? he said. Smith also said during the transition period, Ford Credit would continue to support vehicle and dealership financing. ?But we are also working on the replacement plans.?
Smith also said that the company sees raw material pressures and is working closely with suppliers. ?There is no mandate to integrate both the R&D divisions of JLR and Tata Motors. However, both R&D teams will be exposed to each other. There is also no legal restriction on Tata Motors accessing JLR technology,? Smith said.
In Friday?s concall, Smith said that the production of Jaguar is primarily limited to Birmingham and Liverpool. ?Ford will supply components at commercial terms for the next seven to nine years.? He also added that Ford?s next pension fund infusion would to be in 2009.
