Tata Motors, India?s largest truck maker, will start making its light commercial vehicles (LCVs) including its largest selling Ace mini-truck, at its Dharwad plant in Karnataka from the third quarter this financial year. At present, the company?s Pantnagar plant makes Ace mini-truck at full capacity.

?We are increasing the production at Dharwad and would start producing our LCVs from there in the next quarter,? Ravi Pisharody, president, commercial vehicles business unit at Tata Motors told FE in an interview on October 18.

Dharwad plant now makes Marcopolo buses by Tata Marcopolo Motors, a joint venture between Brazil?s Marcopolo with 49% stake.

Tata Motors did not divulge the investments made to build plant. The Dharwad expansion will be part of the investment planned by the company to spend around R3,000 crore a year on expansion and upgradation until 2014, C Ramakrishnan, chief financial officer, Tata Motors, had said in an interaction with FE.

The LCV unit, which will be build in the same location, will make Magic Iris and Ace Zip launched in May. During the launch, the company said it would hike Pantnagar capacity by 1 lakh units to 3.5 lakh units a year.

Tata Motors, that had a first mover advantage with introduction of Ace in 2005, is faced by intense competition by other carmakers including Mahindra & Mahindra (M&M), Ashok Leyland with Nissan, and Piaggio Vehicles (PVPL).

The company has been looking at ramping up capacity and guarding its market share in the ever increasing competition. Tata Motors holds around 70% market share in the LCV segment. M&M is second in league in the LCV segment after Tata Motors with a sale of around 60,000 units between April-September. ?Tata Motors never expected the competition products to do so well. Today, M&M?s Maxximmo is giving a run for the money,? an auto industry consultant said.

He added that the expansion of the capacity at Dharwad is a move to strengthen its market share in the segment and prepare for competition.

Moreover, a chunk of the Ace family of products are also reaching replacement cycle, and hence, experts feel Tata Motors does not want to miss the opportunity.

Tata Motors will start by making 30 Ace Zip and Magic Iris units a day, which will be scaled up to 9,000 units a year.

Between April and September, Tata Motors sold 1,21,918 units in India, a 35% rise from the same period previous year.