Tata Motors, as a part of their international expansion strategy, is all set to enter the Latin American market. The company has decided to invest in setting up an assembly unit in Mexico. The projected investment amount for the same is around USD 100 million (Rs. 550 crore). Of late, the company has been making strategies to enter the international markets and this move is a result of that planning. However, the Tata’s will not establish themselves as an individual unit and thus are scouting for a local partner.
The decision for having a partnership with a local firm has been taken so that it becomes easier for the company to build the sales, service and distribution networks. This would also help them in reducing the production costs. The new plant in Mexico, once set, would assemble the Tata Nano, Tata Indica, Tata Aria, Tata Manza and Tata Vista. The company is betting high on profits by entering a new market with five different models.
The investment for this whole product launch might be huge but the company will get some duty exemption. As per the Mexican laws, a company is entitled for some duty exemption if it invests USD 100 million in their country and also pledges to build 50,000 or more vehicles. With Tata Motors already fulfilling the first requirement, the second one would not be tough to complete as five different models will be assembled in the new plant and demand could be created with aggressive marketing.
Source – MoneyControl.com
