The Hindu Business Line : Tata Motors acquires Nissan facility in S. Africa

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Geneva March 7 Tata Motors' global manufacturing plans have got a boost with the acquisition of a facility in South Africa. After the end of the Rover deal in the UK, Tata Motors could have a more concrete foray into the European markets when the facility starts manufacturing the company's vehicles.

The currently empty manufacturing facility, located in Pretoria, near Johannesburg, was previously owned and operated by Nissan Motor of Japan.

The property has now been acquired by Tata Africa, a subsidiary of Tata International, and the Tata Group is now in the process of conducting the due diligence for working out the modalities of using the facility to set up a manufacturing and car assembly plant that will possibly be used to roll out the Tata Indica and the Indigo sedan for the South African market.

Access to EU

The new manufacturing outfit, that may be set up under a new jointly owned subsidiary, would also be used to launch Tata vehicles into the European market. Tata Motors will attempt to leverage the free trade agreement that currently exists between European Union and South Africa. According to Tata Motors officials, the FTA will enable duty- free export of their vehicles from this facility to the EU.

Talking to visiting journalists at the Tata exhibit in the Geneva Auto Show 2007, Mr Ratan Tata said that the demand cycles in the automobile industry during the past have shown that the company cannot depend on one market alone anymore. "We have to protect against a downturn in any one economy by having a global footprint covering many geographies," he said. Alliance with Fiat

Speaking about Tata Motors' alliance with Fiat Auto he said that the two companies are jointly working to complete work on the new joint facility in Ranjangaon, near Pune, where cars of both the brands will be manufactured. Mr Tata confirmed that while the Grande Punto of Fiat will roll out of the new common plant, for Tata Motors, the new Indica and the new Indigo sedan will be produced at the facility.

The new plant will also be used to manufacture Fiat's 1.3-litre DDiS engine for use by both the companies. The same engine is currently being manufactured by Suzuki for use in Maruti vehicles. When completed, this diesel engine will co-exist with the current 1.4-litre Dicor diesel engine of Tata Motors and the similar-sized petrol engine that is currently being offered with the Indica and the Indigo.

Talking about the relationship with Fiat Auto of Italy, Mr Tata said that the two companies have a very open, complementary relationship. But contrary to market perceptions, Tata Motors is not considering acquiring any equity holding in the Italian auto major, he said. "There will be no cross holdings between the two companies, though we are constantly looking at ways by which to expand the alliances' scope of partnership," Mr Tata said.

More Stories on : Cars | Overseas Investments | Mergers & Acquisitions | Tata Motors Ltd

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