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Last Updated: Wednesday, 17 September, 2003, 17:23 GMT 18:23 UK
India firm rolls out next Rover
Rory Cellan-Jones
By Rory Cellan-Jones
BBC business reporter

Tata Motors, the Indian firm that is building MG Rover's next car for the UK market, has been showing off the City Rover, which is due to go on sale in November.

Tata, a former truck maker that expanded into consumer automobiles in the 1990s, is making the City Rover at its plant in Pune, in the western Indian state of Maharashtra.

If the project goes well, the Tata's alliance with MG Rover could expand into a deal whereby Indian-designed cars are constructed in the UK, says Tata boss Ratan Tata.

Tata Motor's Indica model
MG Rover's new small car is modelled on the Indica
In an exclusive interview with the BBC, Tata Motors boss Ratan Tata said he anticipates the two carmakers could work together on other models.

'Not a flirtation'

MG Rover's new small car, the City Rover, is based on Tata's Indica model, which was the first passenger car entirely designed and built in India.

Ratan Tata, the boss of a corporate empire which includes steelmaking, telecoms and the Tetley tea business, says the alliance with Rover is "a very serious relationship, not a flirtation."

If the City Rover project works, he said, "the combined skills and expertise could make a very interesting combination."

Engineers from Rover's Longbridge plant have been with Tata in Pune for the last few months, as the factory prepares to start production of the new model.

Nervous, but proud

On the day we visited, a sign proudly claimed the completion of the first City Rover.

Nervous managers were not keen for us to examine the front of the car as the fine details are still being sorted out. But it looks very similar to the Indica - with more stylish trim and a Rover badge.

But Tata says the suspension has been changed to suit British roads. "It will feel like a Rover," a Tata manager insisted.

Ratan Tata said one way to develop the alliance would be for new models to be engineered in India, then produced in the UK.

"We would create efficiencies and economies for ourselves, each widening our product range and sharing costs," he said.

Cheaper workers

For Rover there is one big advantage in building its new car in India rather than Birmingham - labour costs.

Pradeep Mali, a 22 year-old who has just graduated from Tata's apprentice scheme, earns around 100 ($160) a month.

His British equivalent would earn fifteen times as much, but Pradeep is convinced he is just as skilled.

"We'll produce such quality that our work will compare to a European workforce," he told me, from under the bonnet of a new Indica on the production line.

Tata has long been India's biggest truck maker, but its decision to invest in car production in the mid-90s , without linking up with an overseas firm, was seen by many as a foolish gamble.

Today the Indica project is profitable but the coming months will show whether British motorists really do want to invest in what is essentially an Indian car.

Rover unveils Indian connection
08 Jul 03  |  West Midlands
MG Rover takes stock
24 Feb 03  |  Business
New MG Rover built in India
20 Dec 02  |  England

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