Riding on Make in India wave Tata Motors wants to build 'Battle Tanks'.
The defence division of Tata Motors, India's biggest automaker, is eyeing Rs 60,000 crore contracts to build combat vehicles, double turnover in two years and supply main battle tanks to the Indian Army as it aims to defend its leadership position among the private companies.
The pace of aggression by local companies like Tata Motors is centered over the race to have the largest piece of the $100 billion worth of defence acquisition laid out by Prime Minister Narendra Modi over the next decade from local companies.
The Mumbai-based company bagged a Rs 914 crore contract to supply 1,239 indigenously developed high mobility multi-axle vehicles, which is the single largest order awarded to an Indian private original equipment manufacturers in land systems under the DPP by the Indian Army.
Vernon Noronha, vice president, defence and government business, Tata Motors said, "In the last two years of the previous government there was almost no orders coming but one year after the present government came into power and all our stuck filed started moving and there was a very quick acceleration of orders. And this has enthused not just for Tata Motors but for the entire auto industry."
Tata Motors has an order book of Rs 1,500 crore to be executed over the next two years. It clocked revenues of Rs 1,200 crore last year and aims to double it in two years, Noronha added. In the last three years the division generated revenues of Rs 2,000 crore or about 3 per cent of Tata Motors total revenues.
Indian companies are fast building capabilities to grab a piece of the defence pie. For instance in less than two weeks Mahindra & Mahindra forged alliances with two European companies to supply underwater warfare equipments and military choppers to the armed forces. Anil Ambani-led Reliance Group entered the defence sector with the acquisition of Pipavav Defence.
"Earlier Indian vehicles were called for trials or when RFPs (request for proposal) were issued at snails pace, today the Indian Army and ministry of defence is chasing companies asking us to put our vehicles for trails as fast as possible", Noronha added.
The Rs 60,000 crore contract to build Future Infantry Combat Vehicle (FICV) is one of the biggest defence contracts of recent times. The previous UPA government had floated an expression of interest (EoI) in 2008 following which eight private Indian companies responded including Bharat Forge, Titagarh Wagons, M&M and Tata Motors. The Modi government scraped the previous EoI and a revised EoI is expected to be issued in the next couple of months.
Besides orders worth Rs 1,053 crore for the light armoured multipurpose vehicle (LAMV), more than Rs 1,000 crore for armoured personnel carrier (Kestrel) and Rs 3,000 crore for general service vehicles are also targeted by the same companies. The wheeled infantry combat vehicle is being built by Tata Motors in association with the Defence Research and Development Organisation (DRDO) for which the Army is looking to procure 100 units.
"Eventually we would like to become a manufacturer of light tank and then the main battle tank in the future. That is how we would like the progression to happen. The army released a request for information to develop future ready combat vehicle (FRCV) which will be the main battle tank. We have also put in a response", added Noronha
Courtesy: IBC News
