MG Rover, the UK based auto major, is considering sourcing the diesel Tata Indica too even as the petrol version of the car, CityRover, is slated to hit the European roads in November 2003. 

“There is a growing market for diesel cars in Europe but that excludes low-powered engines. We are currently discussing the suitability of the 70PS diesel engine for the CityRover. We will wait to see how the petrol version of the car does before we make any other decision,” said Kevin Howe, chief executive, MG Rover. 

But that’s not all, Tata and MG Rover have been discussing a number of other projects to leverage the joint venture they entered into in December 2002 with the CityRover. 

“There is a great synergy between the Tata Motors team and the MG Rover team, we will definitely capitalise on that. We are discussing a number of possibilities with them. We are not even ruling out importing other Rover products and marketing them in the country” said D Sumantran, executive director, Tata Motors. Tata Motors has signed a five year contract with MG Rover for supplying 1,00,000 CityRovers. 

Tata Motors has entered into an agreement with Phoenix Holdings, MG Rover’s parent company, for the distribution of the Tata Safari and the Tata 207 D1 pick-up vehicle. 

Another subsidiary of Phoenix Holdings will source and supply the spare parts for the Tata products from Tata Motors in Europe and the UK. 

But its commitments to Rover is not stopping Tata Motors from exploring the European markets itself. 

The Indica and the Safari are already found their way into the southern European markets like Italy and Spain. 

Tata Motors will soon launch the Indica all over Europe where it will compete directly with the CityRover. 

The European small car markets is expanding fast and at 4.5 million vehicles a year it accounts for nearly 20 per cent of the total European passenger car market. 

MG Rover had a strong presence in the segment with its Mini and Metro before its split with BMW, the CityRover will be its first offering in the B-segment since then. 

The company made quite a turnaround in the last three years by reducing its losses from ś800 million to around ś100 million in the last fiscal.