Tata to produce Rs 1 lakh car at Dharwad

Tata to produce Rs 1 lakh car at Dharwad
Financial Express.com

In discussion with TVS, Hero and Kinetic to co-invest in multi-location assembly facilities

RAJEEV DUBEY & RAVI KRISHNAN
Friday, January 13, 2006

NEW DELHI, JAN 12: Tata Motors has shortlisted Dharwad in Karnataka-where the group’s excavators business is located-as one of the 3-4 locations to produce its Rs 1 lakh car, its engines and the powertrain which are being developed in-house. The project is code named Project X3. The choice of Dharwad on the Bangalore-Pune Highway is to make best use of two of India’s largest auto component manufacturing hubs.
For other locations, Tatas are in discussion with the TVS group, Hero group and Kinetic Motor to co-invest in the multi-location assembly facilities for its Rs 1 lakh car, according to senior officials of component suppliers who have participated in discussions with Tata Motors.

When contacted, Tata Motors spokesperson said, “ I cannot commet on the Rs 1 lakh car.”TVS Motor managing director Venu Srinivasan said, “No such proposal has come to me though I can’t say for any other TVS group company.”

Group chairman Ratan Tata has targeted annual sales of 1 million units-nearly equivalent to India’s current size of the passenger vehicle market-for the new vehicle due for launch in 2008. The company has planned multi-location assembly of the car to cater to these volumes.

Tata Motors has also decided to power this car with a Euro IV compliant 700cc petrol engine, rather than a diesel engine. Group chairman Mr Ratan Tata has already declared that it will be a rear-wheel powered car which means that the engine will be at the back of the car. The engine is currently going through validation and the first engine ‘Alpha’ will roll out by June this year, according to sources close to the development.

Sources say Tata Motors has opted for a 700cc petrol engine as it will be a light car and will not be able to withstand the vibrations generated by a diesel engine. Besides, diesel engines are more expensive than petrol engines which would have impacted the pricing of the car. The other reason being that the customer would benchmark the Tata car with the Maruti 800 which delivers 45 bhp at 6,000 rpm. It would require a higher cubic capacity diesel engine to deliver this level of power in the car.