Tata Motors may export Ace to Myanmar

Tata Motors’s joint venture in Bangladesh is considering exporting its small commercial vehicle, Tata Ace, to Myanmar and the northeastern parts of India.

Tata Motors has an assembling plant in Myanmar with the capability to manufacture small commercial vehicles. The company caters to the Northeast from its plants in the country but exporting vehicles from Bangladesh, according to the company, will be more viable for the region and cheaper than exporting vehicles from India.

Abdul Matlub Ahmad, chairman of Nitol-Niloy Group, which owns 60 per cent in the joint venture firm with Tata Motors, said discussions were on with the Indian carmaker to export Tata Ace from Bangladesh.

If it fructifies, Ahmad will have to increase the installed capacity of the Bangladesh plant. Most Tata Ace vehicles plying in Bangladesh are currently exported from India.

The Bangladesh plant has an installed capacity to roll out 10 such vehicles daily, which needs to be scaled up to manufacture

50,000 vehicles annually.

Tata Ace has an 85 per cent market share in Bangladesh in the small commercial vehicles segment and the company manufactures around 6001,000 vehicles every month.

Being the largest stakeholder in the joint venture company, most of the investment will be borne by the Nitol-Niloy Group.

“We have a duty-free export arrangement with 39 counties, including India. So far, we have not been using it to its full potential but now things are changing”, Ahmad said on the sidelines of an event organised by the Confederation of Indian Industry here.

He added that Bangladesh offers a 15 per cent incentive on engineering products made in the country and if the group is able to secure that incentive, export prices to northeast India as well as Myanmar will be competitive compared to the current rates from India.

For any product to be classified as ‘Made in Bangladesh’, 25 per cent of the sourcing has to be local.

On account of better logistical viability, Indian motorcycle maker Hero MotoCorp is also considering importing motorbikes from its joint venture with Nitol-Niloy Group for the Northeast.

Hero MotoCorp owns 55 per cent stake in the joint venture, which produces 87,000 motorcycles every month with an installed capacity of 200,000.

“The export of Hero-branded motorcycles to northeast India from Bangladesh is logistically and economically more viable, considering the vast border and waterway network we share with that region,” Ahmad added.

Tata Ace has an 85% market share in Bangladesh in the small commercial vehicles segment and makes 600-1,000 vehicles every month