Known for its heavy duty trucks, buses and passenger vehicles, Tata Motors is foraying into the arena of defence where it has smelt the opportunity of earning whopping revenues. At a time when its shares are surging, it is transitioning from just providing logistic support to supplying combat vehicles including front line combat vehicles, as per a news report by The Economic Times. Simultaneously, the company is planning to open up new overseas markets through the hub-and-spoke model in Eastern Europe, Africa, Asean and Latin America.
The company is building tie ups with the brands well recognized in the defence segment, including SUPACAT, a UK-based high mobility vehicle specialist. This will supposedly provide technical assistance for its Light Armoured Multi-role Vehicle (LAMV) project, a combat vehicle based on a defence ministry programme. The company also has collaborated with Malaysian-based DRB-HICOM for import, distribution and assembly of Tata Motors' commercial vehicles and defence range in Malaysia, a step towards expanding into the international market, confirms the ET report.
Besides, the LAMV and its upgrade programmes include missiles carriers, mine protected vehicles, main battle tanks and infantry combat vehicles, Tata has also developed the WHAP (Wheeled Armoured Amphibious Platform).
Defence business is expected to account for 15 % of its total revenues, a 5 times jump from 3 % at present, and exports volumes to increase to 150,000 units from about 50,000 in 2014-15.
"The potential is very large...10 % is not a good number, our defence business can be much bigger than 15 per cent in the future," Ravindra Pisharody, executive director and head of commercial vehicle business at Tata Motors told the ET. Pisharody was referring to Rs 900 crore order that Tata Motors secured from the Indian Army for supplying 1,200 trucks for material handling cranes for loading, unloading and transportation of ammunition pallets, spares and other operational equipment.
Not only India, the Indian multinational automaker has supplied defence vehicles in markets including the ASEAN, SAARC and Africa. The company recently received an order from Myanmar for about 500 units and it completed deliveries for 520 defence vehicles to the United Nations Multidimensional Integrated Stabilisation Mission in Mali.
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