Apart from its usual business proposition of selling high-end sports utility vehicles, which were launched in India [ Images ] on Sunday, UK automotive brand Land Rover [ Images ] is talking to the Indian government for supply of sophisticated and modern military vehicles to the armed forces.
The company is developing a new model in its research and development centre in the United Kingdom, which will primarily address the defence needs of most countries around the globe, including India, said a senior executive from Land Rover.
Bob Grace, director (overseas operations), Land Rover said, "We have already started the discussions with the Indian government for sale of Land Rovers. However, we cannot comment on the status of the talks as it is confidential."
According to estimates, the Indian government will be spending about $30 billion over the course of next five years to modernise its weaponry to counter the threat from neighbouring China and Pakistan.
Further, it is believed that the government is looking to spend Rs 3,000-4,000 crore (Rs 30-40 billion) for procurement of vehicles like heavy armoured trucks, armoured personal carriers and other tactical transport solutions for the defence sector this year alone.
The new vehicle, which is built on a completely new platform by Land Rover, is also keen on winning orders from other regions like the European nations, China, Brazil [ Images ] and Russia [ Images ]. Land Rovers have been witnessing a steady growth in demand for its vehicles from these emerging economies.
Land Rover is not new when it comes to development of military vehicles. The company has been building vehicles, including light 4X4 vehicles, which can be used in defence as well as peacekeeping roles for the armed forces, for over 60 years.
A standard military vehicle from Land Rover is based on the Defender heavy-duty 4X4 platform. The Defender is sold in a variety of body styles including station wagon, hard top, pick up, double cab pick up and utility station wagon. The military version of the Defender, however, is based on the same basic chassis with improved engine and powertrain, axle and bodywork.
Land Rover will try to leverage Tata Motors' [ Get Quote ] expertise in selling defence vehicles to the Indian government as the Indian truck maker has been supplying vehicles to the defence sector for nearly five decades.
Tata Motors supplies vehicles like light armoured troop carrier, riot control vehicle, ambulances, short bus chassis and truck fire fighter, among other related products. It also supplies products to the Indian police and paramilitary forces.
Apart from Tata Motors, companies like Ashok Leyland [ Get Quote ], Tatra Vectra, BEML and Mahindra & Mahindra also supply vehicles and related products to the Indian armed forces.
Defence contracts from India and overseas will prove to be a major factor in driving growth and margins for Land Rover, which saw sales slump by almost 40 per cent last year.
Land Rover saw sales of 120,000 units during the 10 months starting June 2008 against 198,000 units sold in the same period of the year previous to last.