Tata to invest Rs 600 crore on combat vehicle production

Tata Motors plans to invest Rs 600 crore to set up an R&D and manufacturing plant for combat vehicles at Dharwad, Karnataka. The news was originally reported by Business Line.

This announcement could possibly mean that Tata is positive about receiving more defence orders from the government. The new unit is expected to have an annual capacity of 200 units and will focus exclusively on Futuristic Infantry Combat Vehicles (FICV).

Tata Motors had revealed its tentative plan for a new plant earlier this year, saying that any new investments would depend on the company getting government contracts. Tata Motors, along with Larsen & Toubro (L&T), Mahindra Defence and OFP are currently vying to get the contract to manufacture 2,000 FICVs for the army.

The lucrative defence sector is important for Tata Motors as it seeks to increase its overall revenue by 25-35% in the current fiscal. In 2011-12, its revenue from defence orders was reportedly Rs 1,000 crore, a 50% rise from the previous year. It currently has 40% market share in the wheeled military segment and a high 75% share in internal security.

In the Defence Expo in March 2012, Tata Motors showcased five new defence vehicles, including a micro bulletproof vehicle, a missile carrier and a light armoured vehicle among others.

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