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Ratan for support to auto brands

Our Bureau

MUMBAI, July 3

MR RATAN N. Tata, Chairman, Tata Engineering, has said the country's automobile policy must support Indian brands even as it encourages foreign direct investment (FDI) into the sector.

In the company's 2001-2002 annual report, he says, "A nation's auto industry should holistically encompass skills to develop products and technologies, manufacturing and assembling of products, and ownership and promotion of brands.

"The auto industry in India today is primarily an extension of US, European, Japanese and Korean manufacturers, with all product development and engineering activities as well as brand ownership residing outside of India. Many of the new entrants have only located varying levels of assembly operations in India.

"While the new Auto Policy rightly encourages foreign direct investment, it would, in addition, need to support and encourage Indian brands, which have also established high-skilled engineering and product development capabilities in India."

The observation comes against the backdrop of Tata Engineering's sharply reduced losses last fiscal and its growing success with the Indica. The latter has a leading position in the domestic market and plans are afoot to take it to select markets in Europe, Iran and Latin America.

Mr Tata, who says there is a growing view that specialised stand-alone automobile manufacturers will have a place in the industry, noted before emphasising the need for encouragement to Indian brands in the auto policy, "It must be recognised that the necessary investments to continue to develop and renew a range of products would be uneconomical, given the limited size of the Indian market.''

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