Tata Motors, India's largest maker of cars and trucks is working on new variants of its ₹1 lakh car Nano to overcome challenges posed by high fuel prices, which could affect car sales, company chairman Ratan Tata has said.
The company is also considering a need to introduce a greater number of attractive products for Jaguar and Land Rover, and to re-kindle Jaguar's past image connected with its sports car heritage. "Both brands have tremendous unfulfilled market potential and a significant global presence," said the company's annual report quoting Tata.
Tata has also stressed on a need to "manage the completion of the Singur plant and introduction of the new Nano in the market". The company plans to launch the car in the last three months of 2008.
"New variants of the Nano are also currently under development to meet the new environmental and fuel price challenges, as also the market requirement of several international markets," Tata said.
While terming the year ahead as "a year of major challenges," he said, when "higher fuel prices will negatively impact both commercial vehicles and passenger car sales." Tata has forecast difficult times ahead for the automobile industry in the coming years, and said that manufacturing facilities for Tata Motors would be expanded to meet domestic and global demand in the future.
Tata, who heads one of India's largest corporate houses said there would "an enormous and unprecedented increase in material costs in steel, tyres, and the like, and there will be the impact of tighter money supply with higher interest rates."
Talking about the acquisition of Jaguar and Land Rover (JLR) earlier in the year, Tata said, "While dealing with these challenges in India, the Tata Motors' operations will also have to absorb the cost of the JLR acquisition, and deal with its integration."
While noting these challenges appear daunting, Tata said "the year ahead will be no more daunting than the challenges they have faced in difficult years in the past."