Tata Motors, India’s biggest commercial vehicle maker, is in talks to buy Japanese conglomerate Sumitomo’s majority stake in Indian truck and bus maker Swaraj Mazda, local media reports said on Thursday.
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A report in the Economic Times newspaper said the deal under which Tata would acquire Sumitomo’s 53.5% stake in Swaraj Mazda could be worth up to US$54m dollars.
A Tata Motors spokesman called the report “speculation”, news agency AFP reported.
The news comes as Tata aims to boost its position in the light commercial vehicle market, which will soon see the entry of new players such as General Motors and its Chinese partner SAIC to challenge the domination of long-established domestic firms like Tata and rival Mahindra and Mahindra.
GM and SAIC last week said they were forming a new alliance focused on India that would sell small cars and light trucks in the country’s fast-growing vehicle market.
India’s light commercial vehicle market is growing at 40% a year while new car sales in the country rose 61% year on year in November.
The Economic Times said the acquisition of a majority stake in Swaraj Mazda would also provide Tata Motors access to Isuzu technology for commercial vehicle and buses because Isuzu holds a 1.99% stake in Swaraj Mazda.
Tata Motors, India’s third-largest car manufacturer, recently acquired Spain’s Hispano Carrocera, a global leader in bus and coach making, AFP noted.
