Tata's dream car to run on GE plastic

Tata Motors is exploring the possible use of re-engineered plastic supplied by General Electric Co for the cheap, small car it hopes to launch in two years, chairman Ratan Tata has said.

Addressing shareholders at the 61st annual general meeting, Tata said: "We are keen to explore this area with GE, and GE's CEO Jeff Immelt is also very keen." However, he added that a possible venture in this direction would not cut the cost of the car.

Tata said the car would also use some modern adhesives instead of welding to cut costs. Priced at around Rs 100,000, it would be introduced in 2008. It would cost less than half the price of a basic car from market leader Maruti Udyog.

Tata Motors was trying to make the engines on its own. The company had announced an investment of Rs 1,000 crore (Rs 10 billion) in a plant in West Bengal for manufacturing the car.

"Once it is launched, there might be some players who would replicate our model. There is going to be a lot of competition and price repositioning," Tata said.

The company has not indicated what the plant's capacity will be; but Tata said the "addressable market" for such a car would be about 1 million units a year at a "mature stage." He said the company had projected a market potential of 3.5 million by 2011.

The company was also exploring the option of joint manufacture of products with Fiat at the latter's Ranjangaon facility, which had not been used since the late 1990s.

Negotiations were continuing between the two companies so that Tata Motors could distribute Fiat's luxury cars like Alfa Romeo, Lancia, Masserati and Ferrari, Tata said.

Talks were also on to consider production and product sharing between the two companies on a global basis.