Tata Motors buys Nissan’s African unit
Tata Motors today said Tata African Holdings, part of the same group, had acquired a South African manufacturing plant of Japanese auto giant Nissan.
While Tata executives did not give the details of the transaction, sources said the company would use the facility to manufacture trucks locally to cut costs and be closer to the African market.By producing vehicles in South Africa, Tata can also benefit from a trade agreement that South Africa has with the European Union, through which it will enjoy favourable import duties.
Tata had hinted earlier that it was looking to set up a manufacturing plant in South Africa to tap the potentially huge commercial vehicle market there.
The company now sells its 6- and 10-tonne trucks, tippers and 1.3 tonne flat-bed vehicles in South Africa.
It has quickly emerged one of the prominent players in the commercial vehicles market there, with competitively priced products.
In 2005-06, it sold more than 16000 units.
Speaking at the launch of Auto Africa last week, Tata Motors managing director Ravi Kant had said that the group was looking to increase production in the run-up to the 2010 World Cup of soccer.
With local new-vehicle sales having double-digit growth in the past few years, the local market has the kind of volume demand Tata is looking for.
South Africa enjoyed the most robust growth in new-vehicle sales in the world last year.
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