Ratan Tata, chairman of Tata Engineering and Locomotive Company Ltd (Telco), has assured the shareholders that the new car project, touted as the first indigenously designed and manufactured, is on schedule for both the petrol and diesel versions. It is within cost targets in projected volumes and will be introduced in 1998-99 at the manufacturing facility which is coming up at Chikhali, near Telco's existing Pimpri works.

The new Tata Safari- a five-door 4x4 sports utility vehicle (SUV) is undergoing field trials and will be launched during the current year, the first in the high end SUV segment. Other plans for the current year include upgrading the 35 tonne 4x2 tractor truck to a 40 tonne vehicle.

Telco has charted substantial capacity expansion during the current year. It has a Letter of Intent (LoI) which it is in the process of turning into an Industrial Licence to increase capacity at Pune. This will take Telco's overall capacity at Pimpri and Chikhali to 400,000 vehicles from the existing 120,000.

Telco has acquired 688 acres of land for its special purpose and heavy (SPV) vehicles and construction equipment manufacturing facility at Dharwad Growth Centre in Karnataka. The investment for this project, at Rs 425 crore, will create facilities to manufacture 5,000 vehicles and 500 units of construction equipment. Production is expected to commence by end of 1997.

The company's annual report notes that while there was a slow down in the sale of its commercial and passenger vehicles during the second half of 1996-97, Telco managed to increase its total sales volumes during the year by 19 per cent, at 215,261, by altering its product mix to meet the changes in market demand. Domestic sales of medium/heavy commercial vehicles (M/HCVs) at 102,960 amounted to a 20 per cent increase over the previous year, ensuring Telco retained its 72 per cent market share in this segment. Telco's market share of the light commercial vehicle (LCV) market increased by 5 per cent, from 62.5 per cent to 67.2 per cent despite a decrease in the overall domestic LCV market.

The runaway success of the multi-utility vehicle (MUV) Sumo resulted in the production capacities earmarked for the Sierra and Estate being diverted to the Sumo. While the Sumo notched up a 31.2 per cent of the MUV market, the company's share of the high end car segment dropped to 6.4 per cent from 8.8 per cent due to the shifting of production facilities of the Sierra and Estate. Exports declined by 3 per cent, keeping in line with overall automobile exports from the country, although the total value increased by 5 per cent, to Rs 664.84 crore. Nearly half of Telco's exports of 16,005 vehicles in 1996-97 was contributed by the 207 family. Product variants of the Crew cab pickup, the LPO 1316 bus and the 207 family fitted with turbo-charged engines were introduced in limited numbers in the export market, to an encouraging response.

A new collaboration agreement has been signed with Nachi-Fijikoshi Corporation of Japan for the manufacture of an advanced generation of robots, which will be used in the weld line for `bodies in white' (BIWs) and in the small car assembly line for high volume production.. Telco's turnover for 1996-97 was Rs 10,128.43 crore (Rs 7,881.08 crore in 1995-96), PBT Rs 1,000.46 crore (Rs760.72 crore) and PAT Rs 762.36 crore (530.02 crore). The board of directors have recommended a dividend of Rs 8 per share (Rs 6/- in 1995-96) on ordinary shares of Rs 10. The dividend payout will thus be Rs 200.61 crore (Rs 143 crore in the previous year). Among the resolutions to be tabled at the July 30 annual general meeting is the right to raise Rs 500 crore through a private placement of non- convertible debentures (NCDs) with FIs, banks, mutual funds, the Army Group Insurance Fund (AGIF) and other lending agencies.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.