Tata Motors targeting $1-bn turnover from defence, open to foreign contracts, too

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The defence arm of Tata Motors is confident of increasing its revenues to USD 1 billion as it aggressively bids for new projects and tenders floated not just by the Indian Army but by armies of other countries, too.

From Rs 900 crore recorded in 2013-14, Tata Motors will close the current year with revenues of Rs 1,650 crore and is targeting Rs 1,800-2,000 crore revenues next year just from defence. The Tata Group, meanwhile, is estimated to have clocked revenues of Rs 2,650 crore in 2015-16 from the defence business.

Tata Motors is bidding for multi-billion dollar contracts for armoured, combat, logistics and combat support projects of the Indian Army. The Mumbai-based company won contracts for supply of high mobility vehicles, pick-up trucks, tippers and general service vehicles to the army.

“We are looking at a turnover of USD 1 billion a year just from defence,” Vernon Noronha, Vice President for Defence and Government business at Tata Motors said to an in-house Tata magazine called Tata Review.

Tata Motors is serious about the defence business and the ongoing reorganisation of the company’s processes and, structures will give it a single-minded approach to the defence sector, said the report. The company presently has a market share of 40 percent in the military segment and 75 percent in internal security which amounts to about 3 percent of Tata Motors’ annual revenues.

Tata Motors has dedicated facilities in Jamshedpur and Pune for defence production. The company works with a global supplier base, and has forged partnerships to market its products in Malaysia and, more recently, Indonesia.

Tata Motors is one of five companies who is awaiting the government’s announcement on now-delayed, USD 10 billion contract to make the Futuristic Infantry Combat Vehicle (FICV). Besides the FICV the company is also bidding for Future Ready Compact Vehicle which will replace the Army's T-72 battle tank and the Future Main Battle Tank which will replace the T-90.

A mine protected vehicle project is also underway for which prototypes are being sent to South Africa for testing as testing them in India will mean delays due to red-tapism.

“We have a mine-protected vehicle that we currently have to take to South Africa for testing. We can’t test it in India because here we need a licence, ammunition, explosives and 20-30 certificates. It’s cheaper to put the proto on a ship, sail it to South Africa and do the blast test, etc, there”, added Noronha.