With eye on FICV deal, Tata Motors mulls setting up facility at Dharwad

Confident of bagging the 60,000-crore deal to build the Future Infantry Combat Vehicle (FICV) for the Indian Army, Tata Motors Limited is considering setting up a new manufacturing and design facility in Dharwad, where it had already acquired land. With an eye on venturing into the making of frontline combat vehicles, the company expects combat and tactical vehicles to contribute to its topline growth by 80%.

"It is a natural progression. Whoever is first off in the FICV programme will naturally progress to light tanks and main battle tanks," said Tata Motors vice president, Vernon Noronha.

"The foreign players get a feeling that Tata Motors is best poised. Many such leading companies are in serious talks with us, but we are yet to select one," he added

Industry analysts said the Tata Group was in talks with such global players as the US-based General Dynamics Land Systems, Germany's Krauss-Maffei Wegmann and France's Nexter for the FICV project.

The Indian Army requires 2,610 FICVs to replace the existing Soviet-era Sarath BMP-II combat vehicles. "If we go for the FICV, we will require a new plant. In general thinking, the plant will come up at Dharwad, where we have a lot of land as well as a vendor park, enabling some of our vendors to setup ancillary industries for the project," Noronha said.

The Indian passenger and commercial vehicle manufacturer is keen on capturing a larger share of India's defence spending. Tata Motors recently secured a contract to supply 1,239 indigenously developed high mobility multi-axle vehicles - the LPTA 2038 6x6 specialty truck—to the Indian Army. The 914 crore deal is the single largest order awarded by the Army to an Indian private manufacturer in land systems under the Defence Procurement Policy.

"The first batch of 40 trucks will be supplied by December, and we expect to supply the Indian Army a steady rate of 100 trucks a month after that," Noronha said.

The company also aims to replace the 4000 to 5000 trucks that the Indian Army is currently using. "We are talking of a revenue stream of 2000 crore a year through defence supply revenue. As the combat vehicles kick in, in eight years' time, we hope to attain 4000 crore of revenue," he said.

While the company has traditionally exported to Africa, Sri Lanka, Nepal and Bangladesh, it recently received an order from Myanmar for 1,200 pickups. Exports presently contribute to about 15% of the company's defence revenue.  -TOI