Company officials say that the Indigo stationwagon has a big export potential and will largely cater to overseas demand. "We plan to double our car exports to over 5,000 units in the current year. While our agreement with MG Rover will be a big contributor, we are also very confident that the Indigo stationwagon will be very popular in the overseas markets," Telco’s executive director (in charge of passenger car division), V Sumantran, told ET.

The stationwagon, which is an extension of the Indica platform, will be launched in both petrol and diesel versions. Telco will also launch the sport version of the Indica this year. "We do not expect big volumes from the Indica Sport. The car will cater to a very niche segment," Mr Sumantran said. The company, which will start selling the Rover-branded Indicas in the UK during the second half, is targeting exports of 1.5 lakh units of the Indica over five years. On Telco’s plans to market high-end Rover cars in India, company officials said: "There have been casual discussions, but it is still in very preliminary stages."

Besides, Telco is beefing up its utility-vehicle segment, which had been a laggard during the last fiscal. The company is beefing up its sports-utility vehicle — Safari — to take on competition from Mahindra & Mahindra (Scorpio) and Toyota (Qualis). The company plans a major powertrain upgrade for both the Safari and the Sumo. "We are confident that the high performance petrol version of the Safari will draw big numbers. We are today present at every price point and offer vehicles from pure utility to pre-luxury," Mr Sumantran said.

In fact, the passenger car business has positively contributed to the turnaround of Telco which reported a profit of Rs 300 crore for ’02-03. "If there are no disrupting factors, it is a big opportunity for us to build upon the foundation that we have laid. We are confident about outpacing the industry," Mr Sumantran said.