Just when you thought it couldn’t get any stranger. Recent reports that an Indian tractor maker was working with Land Rover on developing a small car now appear to have been, shall we say, just a little confused. Well, maybe the ‘Rover’ part of it was right – but MG Rover rather than Land Rover. And it looks like a utility vehicle of some sort rather than a small passenger car. We’ve just had this news in from one of our Indian correspondents, Deepesh Rathore, which hopefully, clears things up. – Dave Leggett

Indian tractor maker International Tractors, part of the Sonalika Group, has entered into a technical collaboration with the MG Rover Group for a new utility vehicle that the companies will be developing together.

International Tractors has formed a new company – International Cars & Motors – that will be manufacturing utility vehicles in a new facility in the state of Himachal Pradesh. The state has offered the company a full excise tax, sales tax and income tax exemption over five years and a further 30-percent off on income tax for the next five years. MG Rover is playing the part of a technical collaborator in the new company with no equity participation.

The vehicle in question will be a diesel-engined utility vehicle and it is not yet clear whether it will be a development of the ‘Rhino’ utility vehicle which International Tractors has been working on for the last few years. The very short development time is an indicator that the new UV may come from the Rhino platform. ICML will make 24,000 units per annum of the new utility vehicle initially. Expect the price to undercut everyone else in the market thanks to heavy excise duty rebates, when the UV is released by the end of this year.

In a separate agreement with Powertrain, International Tractors will be manufacturing a 2.0-litre Common Rail diesel engine, which will also be used in the planned UV. This is essentially a development on the Land Rover L-Series diesel with a common rail system and will be able to meet Euro IV emission standards. ICML is set to manufacture 50,000 units of the new engine and it will be exported to other markets as well. Powertrain Ltd will also source engine components from ICML. The companies have also entered into a technical JV for the development of a new six-speed gearbox, which will be developed by ICML under Powertrain’s guidance. 

Sonalika Group has a 12% market share in the highly fragmented Indian tractor industry and has been growing at a fast pace (20-25%) when the whole industry has been exhibiting a downward trend. The company has a buyback arrangement with Renault Agriculture and manufactures the company’s 60-90 bhp range of tractors.

The Rover executives at the agreement signing downplayed MG Rover’s involvement with Tata Motors and the City Rover received scant mention in the presentation. The technical collaboration agreement marks MG Rover entering into the design and development market as the new utility vehicle has little chance of being introduced in the UK by MG Rover. In that sense, MG Rover’s involvement is limited to being a technical consultant.