Tata Motors Ltd’s revenue may get a boost as it braces for an Indian Army programme of buying tracked future infantry combat vehicles. The owner of British premium car maker Jaguar Land Rover Plc is also considering using one of the Land Rover Discovery models for the future requirement of the Indian Army.
Tata Motors will bid for the $10 billion (Rs.54,500 crore) project and expects to corner almost two-thirds of the business, V.S. Noronha, vice-president, defence and government business, said in an interview last week. The development cost of the combat vehicles could be around Rs.300 crore, he said.
If it gets the order, India’s largest auto maker by sales would set up a facility at Dharwad, Karnataka, for making the tracked vehicles, the prototype for which is ready, Noronha said.
Tata Motors is one of the four companies which have received expressions of interest to supply around 2,000 units to the army.
In early 2010, the ministry of defence had invited Tata Motors, the Mahindra Group, Larsen and Toubro Ltd and the state-run Ordnance Factory Board to submit proposals to develop a combat vehicle.
If the order comes through, it would increase Tata Motors’s revenue by 20-30% over the period of the order, according to Umesh Karne, analyst at brokerage Brics Securities Ltd. “It will also help in de-risking the business,” said Karne.
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