Even though Tata Motors’ medium and heavy commercial vehicles plant here is currently seeing a significant drop in production due of lack of demand, for the 1,000-odd ancillary units located here it is good news that the auto major is planning to hike the local content of components from around 55%-60% today to around 80%-85% gradually.
Tata Motors, which has a 60% plus market share in the MCV/HCV segment in the country, produces the vehicles in a major way here and to an extent at its Lucknow plant.
Speaking at the inauguration on Tuesday at the India International Mega Trade & Industrial Fair, RK Sinha, president, Adityapur Small Industries’ Association (ASIA), said it was good news for local ancillary units that Tata Motors was intending to hike the share of local components from the present 55%-60% level to around 80%-85%.
Later, asked by FE how increasing the local components’ share would benefit the company, Tata Motors local plant head AB Lall said such moves help create a healthy eco-system as the local population got jobs and in “many other ways” are included in terms of inventory management and logistics cost.
Among the components, the company is looking forward to buy locally, include those giving its regular and Prima range of MCVs/HCVs technological superiority such as those related to BS-4 (Bharat Stage-4) emission vehicles as well other heavy and sophisticated parts all of which the unit is currently procuring from other parts of the country.
“If they (the local vendors) are able to meet the needs then obviously localisation is going to happen, the number, whether it is 80% or 85% is not very important; they have to be capable of doing that”, said Lall.
Asked if the current set of vendors were capable of producing the items, the plant head said the vendor development cell would assist by providing the right technology and processes to those vendors who were interested in supplying such quality parts at competitive prices.
Vendors said lack of orders from Tata Motors was seeing their units run at only around 40% capacity but it was good news that the auto major wants to procure more locally.