Tata Motors’ Rs 1 lakh car will be sold online

MUMBAI: Tata Motors’ proposed Rs 1 lakh car, slated to hit the market in 2008, may be sold online, too.

Sources close to the development said Tata Motors is in talks with Metaljunction Services Ltd, for using its e-commerce platform (www.autojunction.in) dedicated for e-sales of vehicles.

Metaljunction, a joint venture between Tata Steel and Steel Authority of India Ltd (SAIL), has started an online initiative that allows consumers to buy steel directly from manufacturers.

It is the country’s largest e-commerce enterprise with a transaction value of Rs 5,533 crore in the last fiscal.

A Metaljunction official said, “There is a possibility that Tata may sell its cars through our portal as discussions are currently on but nothing has been finalised yet.”

Analysts said such a move will substantially reduce distribution costs for Tata Motors, which is between 3% and 10% depending on the size of the cars. Eliminating dealers and going online also helps Tata Motors earn better margins on what would be a wafer-thin margin car.

Tata has said the car would also use some modern adhesives instead of welding to cut costs. It would cost less than half the price of a basic car from market leader Maruti Udyog.

The Tatas are also in talks with General Electric to use plastic components. The company is investing Rs 1,000 crore in the West Bengal plant for manufacturing the car  and plans to invest Rs 10,000 crore in its operations over the next three years.