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NEWS UPDATES 25 July 2009

Indonesia’s growth potential attracts Indian car firms 

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Two Indian automakers, Tata Motors Limited (TML) and Mahindra and Mahindra Limited (MML) (BSE:500520), are interested in investing in Indonesia, Indonesian state news agency Antara quoted an Indian auto industry official as saying.

The director general of the Society of Indian Automobile Manufacturers (SIAM), Dilip Chenoy, made the statement at the 4th Indonesia Automotive Conference in Jakarta on Thursday.

Indonesia is one of three countries in the world that have recorded growth and its market is also developing, he said.

"This condition has made the two Indian automotive manufacturers interested in investing here. The two are Tata and Mahindra. They are now still studying the Indonesian market," he said.

TML`s senior general manager of government affairs and collaboration, AS Puri, said the decision that would be taken would be determined by the results of feasibility studies and the government`s response.

"The Nano car will be one of the potential products but in all we have a variety of models from the smallest to commercial types," he said.

Puri said the study would take three to six months and its result would also determine the type of cars to be produced.

"If it is realised, production will also be aimed at exports to other Southeast Asian countries," he said.

The chairman of the Association of Indonesian Automotive Industries (Gaikindo), Bambang Trisulo, said the investment by one company potentially could reach Rp2 trillion ($41.5 billion) for a capacity of 100,000 units a year.

"I do not know when it will be realised. It all depends on them. We hope it will be soon or this year if possible," he said.

Tata Motors had so far expanded into the Asean market by establishing an assembly plant for commercial car types in Thailand. The plant has an annual production capacity of 25,000 units with a total investment of 1.5 billion baht.

"We have started operating in Thailand since the middle of 2008. In 2008 we sold 1,000 units of pick-ups in Thailand," Thailand Tata Motors` chief executive officer Ajit Venkararaman said. Ajit admitted he was seeking a partner in Indonesia to enter the Indonesian market.

 


 

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