Tata Motors looks to clock Rs 4,000 crore sales from defence in 3 years

Over the last two years, it has logged cumulative sales of Rs 2,000 crore from the defence sector.

By PTI | Updated: Jul 14, 2015, 12.17 PM IST

Tata Motors looks to clock Rs 4,000 crore sales from defence in 3 years

MUMBAI: Tata Motors, country's largest supplier of defence vehicles from the private sector, today said that it is looking at clocking Rs 4,000 crore in sales from this segment within three years.

Over the last two years, it has logged cumulative sales of Rs 2,000 crore from the defence sector. Its current order book from this segment stands at about Rs 2,400 crore.

The company's optimism stems from the Modi government's push to defence manufacturing with greater participation from the private sector, domestic as well as foreign. India imports more than 70 per cent of its defence needs, spending about USD 100 billion on such purchases annually.

The company said it has won Rs 940 crore contract to supply 1,239 units of its indigenously developed high mobility multi-axle vehicles (HMVs) from the Army. These orders will be executed over the next two years and are for the 6x6 HMVs with material handling cranes, Tata Motors vice-president for defence and government businesses Vernon S Noronha said.

This contract is the single largest order awarded to a domestic private sector OEM (original equipment manufacturers) in the land systems so far, he told reporters here.

"This Army order is a validation of our strategy and growth potential, for our durable and extensive range of defence vehicles, designed and developed with our evolving customers, including that of security forces across the world.

"As leading suppliers of mobility solutions to our security forces, we will shortly commence delivery of these high-mobility vehicles," Noronha said.

On the importance that the government is giving to local manufacturing of defence equipment, he said, "Earlier, suppliers used to chase the government for orders. But now, the government- the Army and the defence ministry - is chasing us."

Noronha said the company has a defence order book for about Rs 1,500 crore, excluding the just won Army contract, and that it is keen to bid for over 700 light armoured multi- roll vehicles and 100 wheeled armoured personnel carriers that the Army wants to procure.

Of the Rs 2,000 crore sales in the last two years, 30 per cent came from exports, he said.

Tata Motors exports its range of specialised defence vehicles to the SAARC, ASEAN and African regions apart from the UN Peacekeeping Forces in Central and Western Africa and the Indian Ocean island nation of Male.

Tata group's relationship with the defence sector dates back to the World War II era when it had supplied vehicles called Tatanagar to the Allied Forces.

Since 1958, the company has been a regular supplier of trucks to the Army, manufactured at its Jamshedpur and Pune plants, Noronha said, adding that over 1 lakh Tata Motors vehicles are in use with the defence, paramilitary and police.

Developed indigenously, the Tata 6x6 high mobility all-terrain all-wheel drive vehicles, have completed a total trial duration of 25 months, demonstrating maximum performance in the most demanding conditions, he said.

When asked about the capex for the new projects, he said it is part of the parent Tata Motors annual expenditure plans. The company will invest around Rs 3,000 crore in capex this fiscal in its domestic business, while its cash-cow JLR is spending over USD 4 billion on capex.

Tata Motors consolidated sales topped Rs 2.63 lakh crore (over USD 41 billion) in the 2014-15 fiscal ended March 31.

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