MUMBAI, July 30: Truck giant Tata Engineering & Locomotive Company (Telco) is finding the going tough this year. The sales turnover of the company has declined by around 10% to Rs 1,880 crore in the first three months of the current fiscal. Exports have also shown a noticeable fall by 38% to $ 17.74 million.Telco chairman Ratan Tata, however, said that the company expects to achieve 10 to 12% rise in the sale of units by the end of the year. "We could see recovery in the second half with the upturn in the auto industry from October," he said while addressing the company's AGM on Wednesday.In fact, Telco is the second automobile company to report a decline in sales in the current year. Bajaj Auto had announced a fall in sales last week. Telco had reported a higher sales turnover of Rs 10,128 crore and a net profit of Rs 762 crore for 1996-97 as against Rs 7,881 crore and Rs 530 crore respectively in the previous year.Telco which recently raised $ 200 million has planned a capital expenditure of Rs 4,500 crore by the year 2000 of which Rs 1,700 crore will be made on the "dream" small car project. "Our small car project is on schedule and hopes a milestone achievement," Tata said.One or two models of small cars will be displayed during the auto expo in Delhi early next year while the production is likely to start in the later half of 1998. Under the proposed small car project, 50,000 cars will be produced during the first calender year and 1,50,000 cars by the second year. The break even will be 60,000 cars."Small car will be priced close to Maruti 800 or its successor at that time," Tata said and added that it will be India's first indigeneously designed and manufactured car. He added only small components will be imported.Tata said the financing of the proposed capital expenditure will be done as follows: 55% - internal generation, 16% - GDR which company floated in 1996, 16% - yankee bond issue and 13% - other borrowings. The company proposes to approach the lending agencies to subscribe to privately placed non-convertible debentures of an amount not exceeding Rs 300 crore to meet its capital expenditure requirements. "However, there are no plans to go to public," Tata said.Tata said the company will launch a four-door light commercial vehicle- Safari. The company will also resume the production of Sierra and Tata Estate.The 50:50 JV between Tata Industries Limited with Hong Kong based Jardine Matheson will be for an auto retail venture for the dealership of cars that will include non-Telco cars. This is the first equity infusion by the JM group for the promotion of companies in association with TIL since the former picked up a 20% equity in TIL.
