Tata Motors on Friday said it plans to expand its presence and enter the market for medium-sized commercial vehicles in South Korea via its newly-purchased unit Daewoo Commercial Vehicle Co.
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“On top of increasing our market share in the heavy (commercial vehicle) segment, we’ll also go into the medium segment, which is the largest size in the commercial vehicle market,” Ravi Kant, an executive director of Tata Motors’ commercial vehicle business unit, told Dow Jones in Seoul.
The news agency noted that, last month, Tata Motors, India’s largest vehicle company, agreed to buy South Korea’s Daewoo Commercial Vehicle Co. for 120.6 billion won.
Daewoo Commercial Vehicle is the remaining unit of Daewoo Motor Corp.’s commercial vehicle division, after its parent Daewoo Group went bankrupt in 1999 under huge debt, the report added.
Dow Jones said Daewoo Commercial Vehicle’s plant in Kunsan, south of Seoul, has an annual production capacity of 20,000 truck units and Tata Motors aims to double the operating ratio of the plant from the current 25% within the next two to three years.
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By GlobalData“Our first concern is to get a foothold in the Korean market, and (later) we’ll look into how jointly (together with Daewoo Commercial) we can go into other markets, whether in China or elsewhere,” Kant reportedly said. He added that Daewoo Commercial Vehicle will play a very important part in the Tata Motors’ global business strategy.
According to Dow Jones, Kant said the company hasn’t made any decision on its plan to seek a partnership in China for a vehicle manufacturing joint venture but is talking to a number of Chinese companies and will soon shortlist them.
He also reportedly said Tata Motors will closely work with Daewoo Commercial Vehicle on expanding its Chinese business.
Tata Motors said its chairman will visit the Kunsan plant on March 29 to receive a certificate of newly issued shares of Daewoo Commercial Vehicle in which it will own a 100% stake, the report added.
