NEW DELHI, Jan 24 (Reuters) - Britain's MG Rover Group Ltd will buy 100,000 Indica hatcback cars over five years from India's Tata Engineering & Locomotive Co Ltd (TELCO) for sale in Europe, a TELCO spokesman told Reuters on Friday.
TELCO , India's third largest carmaker and the top truck and bus maker, signed an agreement with MG Rover last month to supply the homegrown Indica car to the British firm for sale under the Rover brand in Europe.
MG Rover had picked the Indica to fill a gap in its model range and address the high volume small car segment.
The TELCO spokesman said shipments of the Indica car, which TELCO developed by itself and launched in early 1999, are expected to begin in the second half of 2003. He said the Indica will undergo some design changes to suit the Rover brand but will be made at TELCO's plant in Pune in western India and be shipped in fully built form.
It will be called either the Rover 15 or Metro and positioned below the Rover 25, its lowest priced car.
TELCO will, however, continue to market the Indica, in parallel, under the Tata brand through its own European distribution network.
The Indica, which competes locally with models made by the Indian units of Suzuki Motor Corp , Hyundai and Fiat , has a 23-percent share in the premium hatchback segment.
The spokesman said Rover will also explore possibilities of jointly designing and developing new models and platforms with TELCO in India and buying auto parts from its vendors in India.
MG Rover, an independent British carmaker, has been fighting to break even in 2003 after being sold two years ago by Germany's BMW for just 10 pounds.
Last month, TELCO launched a sedan version of the Indica in the domestic market and also plans to introduce its estate and a sports versions later this year.
TELCO's shares were down nearly two percent at 160.35 rupees in afternoon trade at the Bombay exchange whose benchmark index was 0.66 percent lower then. ($1 = 47.867 rupees)