Tata Motors Sets Sights on Indonesia

Tata Motors Ltd. will launch a sales effort in September that is intended to eventually turn Indonesia into the company's largest market outside India, Bloomberg News reports.

The Mumbai-based company's goal is to generate enough volume in Indonesia from sales of imported vehicles to justify local production then build an assembly plant there, explains Biswadev Sengupta, who heads Tata's operations there.

He tells Bloomberg TV that the company also aims to establish Indonesia as a manufacturing hub from which to export vehicles to members of the Assn. of Southeast Asian Nations. The planned Indonesian factory must reach at least 40% local content to avoid import taxes on vehicles it ships to those countries.

Tata expects to open its first 10 dealerships in Indonesia by year-end and expand the network to 35 outlets in five years, according to Sengupta. He adds that the company's initial sales focus will be the islands of Bali and Java.

Sengupta says Tata's product lineup for Indonesia will include a small car, pickup truck, van, bus and mining-related vehicles.