Tata Motors hatches Indonesia drive for cars, trucks

Tata Motors will assemble cars and trucks in Indonesia, expecting the country to be its biggest market outside India down the road.

The company has been exploring the idea of assembling the vehicles in Indonesia for over a year now.

TaMo did not share capacity and investment plans, or the exact location, but in a statement said the assembly plant will go on stream next year.

Ratan Tata, the outgoing chairman of the company, had last year hinted that TaMo will start assembling the Nano in Indonesia.

However, in its statement on Tuesday, the company did not clarify on the specific models it plans to assemble.

The multipurpose vehicle segment is the largest in Indonesia. The hatchback segment, though still very small, is growing fast and that is where we want to place our product, Biswadev Sengupta, CEO of Tata Motors for Indonesian operations, told the Jakarta Post.

Ravi Pisharody, executive director (commercial vehicles) of Tata Motors, said in a statement, “Based on customer feedback, we will progressively introduce relevant passenger and commercial vehicles, backed by appropriate distribution and service infrastructure such that we are closest to our customers.”

Indonesia is the biggest automobile market in the Asean region and the company is also evaluating options for setting up a manufacturing base in Indonesia to serve the country and the Asean region. “Significant investments will also be planned for component localisation,” the company said. Tata Motors will operate through its wholly owned Jakarta-based subsidiary, PT Tata Motors Indonesia.

The Indonesian market continues to grow at a fast pace despite a global slowdown in the automobile sales.

Car sales rose 28% to 535,048 units in the first six months of the current calendar year compared with 417,672 in first half of 2011. Indonesia’s domestic car sales rose 45% in June from a year ago to a monthly record of 101,743 cars, according to the Indonesian Automotive Industry Association.

Indonesia’s economy grew at 6.4% in the second quarter, blowing past estimates and well above 2.8% in the comparable previous quarter, primarily led by a domestic consumption story.