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MUMBAI, March 11

TATA Engineering Ltd today informed the stock exchanges that it had signed an agreement with Phoenix Venture Holdings Ltd (PVH), owners of MG Rover group, to distribute Safari off-roaders and Loadbeta pick-up trucks in the UK and Irish markets.

The franchise would be managed by Phoenix Distribution Ltd, a newly created subsidiary of PVH, an official statement said.

The company already exports Safari and Loadbeta to the UK, the new arrangement likely to install Phoenix Distribution as a sole distributor there with sales through MG Rover and former Tata dealerships. The distribution arrangement will be implemented in the next few months with vehicles sold under the Tata brand name.

"This agreement will significantly enhance the Tata's brand presence in the UK and Ireland. Tata utility products have established a niche presence in the market based on their value for money proposition. New upgraded versions of these vehicles with contemporary features, will further enhance value proposition,'' the statement said.

When contacted, a senior Tata official said there was no plan to pick up token equity in PVH's distribution subsidiary. Nor is PVH expected to participate in the domestic car retail network, Concorde Motors, an erstwhile joint venture with Jardine Matheson, now fully owned by the Tatas.

The distribution arrangement for Safari and Loadbeta is different from the previous agreement signed by Tata Engineering for Indica export, in that the signatory then was MG Rover and not PVH. MG Rover is bereft of a utility vehicle line up, since the sale of Land Rover.

Responding to Business Line's querries, PVH's official spokesman pointed out, "We created Phoenix Distribution Ltd in order to dedicate resources and people to the effective distribution of Tata brand vehicles. MG Rover group is dedicated to the task of selling MG and Rover brand vehicles. There is a key difference in this respect, between the two agreements with Tata.

"Safari and Loadbeta will be sold as Tata Vehicles. The new small car imported from Tata, based on the Indica, will be branded Rover.''

According to the PVH official, there are no plans to expand the remit of Phoenix Distribution to other vehicles or brands. "It is dedicated to the task of selling Tata Safari and Loadbeta. However, that is not to say that other opportunities could not be given consideration.''

Tata Engineering said last week that its full range of passenger cars — the Indica, the Indigo Sedan and the Indigo Station Wagon — would be available in Europe, in both petrol and diesel versions, from autumn 2003. The Indigo sedan and station wagon are to debut in Europe through Tata dealers, as already done by the Indica.

Indica exports under Tata Engineering's tie-up with MG Rover, involving likely volumes upward of 1,00,000 units over a five year-period, were scheduled to start by summer this year.

While MG Rover dealerships alone will retail the Indica in UK, the British manufacturer can sell the Indica in continental Europe through its wholly owned sales company. There will be overlap and Indicas retailed by MG Rover and those sold by Tata dealerships will co-exist in some markets.

Beginning export to Europe in 1992, Tata Engineering now sells the Tata Safari, Tata Telcoline (also called Loadbeta) and the Indica, through its distributors in Italy, Spain, the UK, Greece, Hungary, Portugal, Switzerland and Malta. Telcoline currently has a four to six per cent market share in the pick-up segment, while the Tata Safari has a two to four per cent market share.

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