Strong demand for the Ace light commercial vehicle (LCV) and its variants has encouraged Tata Motors to add almost two lakh additional annual capacity for the models by January-February.
The Pantnagar plant in Himachal Pradesh, dedicated to the Ace family, will see output rising to 4.5 lakh units a year. This is after production was increased just six months ago to 3.5 lakh units from 2.5 lakh. Another plant at Dharwad, Karnataka, will start production around the same time with an initial output of 90,000 units annually.
Strong growth
“The Ace and Magic segment is growing 30-40 per cent. We're implementing some changes in Pantnagar and as per an agreement with the Government, we can get certain benefits till a capacity of five lakh units,” said Mr Ravi Pisharody, President of Commercial Vehicles Business Unit at Tata Motors.
He added, “The Dharwad plant will come on stream in January-February. The initial capacity will be for Ace Zip and Magic Iris.”
The Ace LCV family comprises the 0.7 tonne Ace, Ace Zip (0.6 tonne), Super Ace (one tonne) and passenger versions based on the same platforms – Magic, Venture and Magic Iris. The company's Pantnagar plant gets certain lower excise tax benefits, apart from other sops, according to a previous Central Government incentive.
Higher demand
Tata Motors has been selling 15,000 units of the Ace monthly, apart from 2,500 Zip and 1,000 Super Ace. Though combined sales are about 18,500 units, another company official said that the demand is for at least 25,000 units a month.
“If the retail FDI proposal gets through, there is going to be a huge need for such LCVs in rural areas, apart from rising demand for last mile connectivity in cities. We want to be ready for that,” said the official.
Tata Motors expects to guard its market against recent competition in the around one ton LCV segment from Mahindra & Mahindra, Force Motors, Piaggio and Ashok Leyland.