Tata Motors' defence business has got a few shots in its arm from India’s defence forces. Its Safari Storme SUV and the Xenon pickup have been chosen by the Army and the BSF respectively, as their new vehicles of choice.
The company made the official announcements today. Both the Xenon and the Safari Storme will replace the Maruti Gypsy SUV, which has been in use by the defence forces for a long time now. The combined order size, in terms of revenue, stands at Rs 400 crore, or 40 percent of the current annual revenue of Tata Motors' defence business.
Tata Motors says that the initial order for the Safari Storme involves 3,192 units. "Potentially, the order can grow 10-fold," Vernon Noronha, vice-president, Defence & Government Business, Tata Motors, told Autocar Professional. The contract for the order is expected to be signed soon. It is learnt that the Army will replace its parc of 35,000 vehicles and the practice is to invite tenders from makers of 'in-service' vehicles. 'In-service' vehicle, as the term suggests, is any vehicle which is already approved and is in use by the Army.
Though the Gypsy has been the defence forces’ favourite steed for a long time, a need was felt for a vehicle with additional safety features and more power. Equally important was the requirement of a diesel run vehicle as the fuel is more readily available. Switching to diesel-run vehicles, which are also more fuel efficient, also helps the forces reduce its fuel bills significantly.
Most of the Xenons that Tata Motors will supply to the armed forces, will be used by the BSF, which has inducted new Border Out Post (BOP) vehicles to upgrade and enhance the efficiency of troop movement along the border. Tata Motors says it has received an order for over 500 Xenons. Features like airbags and AC (to keep soldiers cool at areas with soaring temperatures) and the higher utility value that a pickup offers helped the Xenon to bag the order. The twin-cab version of the Xenon has been picked up by the forces. Mahindra's Bolero Camper was also in the race for the order.
New orders power Tata Motors’ defence business
These new orders will clearly give a boost to Tata Motors' defence business. It is learnt that Tata Motors will pitch harder for more orders from the country’s armed forces. For the country's Future Infantry Combat Vehicle (FICV) project, it has already formed a consortium with Bharat Forge. USA's General Dynamics Land Systems is a key technology partner. The Rs 50,000-crore FICV project is spread over 25 years and other Indian firms, including L&T and Mahindra & Mahindra, are in the fray for the project.
It is also to be noted that Tata Motors has also bagged a contract to supply 350 units of its SAK 32 4X4 tipper model to the Border Roads Organisation (BRO). The order is worth Rs 63 crore. Thanks to the government's focus on developing road infrastructure in the border states of North East India, this figure could go up three-fold, according to Noronha. With such developments, and perhaps some more coming up, Noronha is confident of a 50-55 percent growth in Tata Motors' defence business this year.