Tata Motors CEO says to invest $625 million to boost sales

By Devidutta Tripathy

MUMBAI (Reuters) - Tata Motors will invest more than 40 billion rupees ($625 million) to boost sales of its passenger and commercial vehicles, its chief executive said on Monday, as the Indian automaker looks to return to profit in its domestic business.

The company has committed to invest 25 billion rupees in its car unit and will pump more than 15 billion rupees into its trucks and bus business this year and annually over coming years, CEO Guenter Butschek told reporters in Mumbai.

Tata Motors, maker of the loss-making Nano small car, will focus on reducing costs, launching new products and ramping up production volumes over the next six to nine months as part of its turnaround plan, Butschek said.

"To return to overall profitability is what we have given ourselves as the ultimate objective for the year 2017/18," Butschek said.

Tata Motors, owner of British luxury brands Jaguar and Land Rover, has been trying to turn around its loss-making domestic unit by modernising products, improving efficiency, cutting costs and streamlining its organisation and supplier base.

The automaker, which has 5.5 percent share of the passenger vehicles market, has struggled to boost sales in a country where rivals Maruti Suzuki and Hyundai Motor have cornered two-thirds of the market.

Earlier this month it ended talks with Germany's Volkswagen Group to jointly develop a car for India and other emerging markets over technical issues.

In February Tata Motors launched the TAMO sub-brand to test new technologies and help it become more responsive to changing market trends. But plans to launch the first TAMO-branded car have been put on the back burner as it focuses on turning around the business, Butschek said.

($1 = 64.0300 Indian rupees)

(Writing by Aditi Shah; Editing by Muralikumar Anantharaman and David Holmes)