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Tata Steel, the world's sixth largest steelmaker, has been selected by Volkswagen and Nissan-Renault as the local steel partner for their projects in India.
A Tata Steel spokesperson confirmed the development but refused to give details.
According to sources, the company has been approved for sourcing steel by the auto majors and specific products will be developed for their respective projects.
"They have lined up major plans for India and details are currently being worked out," they said. Ford, Maruti, Hyundai, Toyota too source their requirements from the Jamshedpur plant.
Nissan is in the process of establishing a plant in Chennai in partnership with Renault. Volkswagen, too, is bullish about the Indian market, as it has already announced that it would introduce two cars this year and build 110,000 cars once its plant goes onstream next year.
The steel for Volkswagen and Nissan-Renault projects would be sourced from Tata Steel's Jamshedpur plant, whose capacity is being expanded by 2 million tonnes (mt) to 7 mt. The additional capacity will go onstream by June. By 2010, the total capacity will be 10 mt.
Tata Steel has been reorienting its product-mix with a focus on auto grade steel for a while.
In 2006-07, Tata Steel enjoyed 45 per cent of the Indian automotive steel market, translating into 700,000 tonnes of steel, the sources said.
While the exact quantum of auto grade steel production is not known, of the 5 mt capacity at Jamshedpur, flat products, which include auto grade steel, account for 2.1 mt. Apart from these projects, Tata Steel has bagged deal for skin-panel from Hyundai and Ford.
Tata Steel is also a 100 per cent supplier to Maruti Suzuki India for its inner panels and 96 per cent steel for the Toyota Innova.
The company will also supply steel for Nano, Tata Motors' Rs 1 lakh car. However, sources said some of the steel requirements for the Nano project were likely to be imported given the cost-sensitive nature of the project.
