Skip navigation
Newswire

India's TELCO to supply Indica cars to MG Rover

BOMBAY, Dec 20 (Reuters) - India's Tata Engineering and Locomotive Company Ltd (TELCO) said on Friday it has agreed to supply its homegrown Indica hatchback cars to the UK's MG Rover Group, to be sold under the Rover brand in Europe.

TELCO , also India's largest truck and bus maker, is part of India's second largest business conglomerate, the Tata group.

Under the agreement, the Tata Indica will be manufactured with MG Rover-specific modifications at TELCO's plant in Pune in western India, a statement from the Indian company said.

It did not say how many cars would be supplied to MG Rover, or the revenue implications of the deal.

TELCO said MG Rover had picked its Indica model to fill a gap in its model range and address the high volume small car segment.

"This new car, which will fit perfectly into our existing product portfolio, will reach a whole new customer base," the statement quoted Kevin Howe, chief executive of MG Rover as saying.

TELCO said the Indica would continue to be marketed, in parallel, under Tata branding through its own European distribution network.

MG Rover, an independent British carmaker, has been fighting just to break even in 2003 after being sold two years ago by Germany's BMW for just 10 pounds.

The Indica, launched in early 1999, has a 23-percent share in the premium hatchback segment. It competes with models made by local units of Suzuki Motor Corp , Hyundai and Fiat .

TELCO officials had said in April the firm was in talks with MG Rover to supply between 30,000 to 50,000 Indicas every year, but had expected the deal to be finalised only 15-18 months later.

TELCO sold 64,000 Indica cars in the year to March. It has sold over 200,000 cars since launch.

Its shares ended up 0.41 percent at 159.50 rupees on the Bombay Stock Exchange on Friday, while the benchmark exchange index was little changed at 3,337.22.