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UPDATE 1-India's Tata Motors plans assembly unit in SAfrica

* To set up truck assembly unit in S.Africa in FY11

* Looking at initial capacity of 3,000-4,000 trucks

* Sees domestic truck sales rising 10-15 pct in FY11

MUMBAI, June 25 (Reuters) - Tata Motors TAMO.BO, India's largest vehicles maker, is working on setting up a trucks assembly unit in South Africa by the end of the current financial year, a top company official said on Friday.

“We are looking at assembling medium-sized and small trucks there for now,” its India head P.M. Telang told reporters. The details of the unit are being worked out and initial capacity could about 3,000-4,000 units annually, he said. The company exports about 2,000-3,000 trucks annually to South Africa now.

Tata Motors currently has truck assembly units in Thailand and Bangladesh.

The company’s truck exports in 2009/10 stood at 30,000 units and it expects exports to be good this year.

“Some markets are looking up ... there is a revival happening across the globe,” said Ravi Pisharody, its commercial vehicles head.

Tata Motors, the country’s largest commercial vehicles maker with more than 60 percent market share, is looking at a 10-15 percent rise in domestic truck sales in 2010/11, Pisharody said.

In 2009/10 it sold 373,615 units of trucks, up 41 percent from a year earlier.

BRACING FOR COMPETITION

The company, which is celebrating five years of the launch of its hugely successful Ace mini-trucks, is confident of retaining market share despite the imminent competition, by launching new trucks and variants across all ranges.

India is the world’s fourth-largest truck market, and the opportunities in the sector are attracting both domestic and global players.

“In the small commercial vehicle segment, the success of the Ace has attracted competition and interest in the segment,” Pisharody said.

Indian utilities vehicles maker Mahindra & Mahindra MAHM.BO last year entered the mini-truck segment with its Maxximo, which competes directly with the Ace.

Providing competition to the domestic firms will be the General Motors [GM.UL] and SAIC Motor Co 600104.SS combine, which will be launching its mini-trucks in late 2011, Germany's Daimler DAIGn.DE entering the segment in mid-2012 and Nissan's 7201.T joint venture with Ashok Leyland in 2011.

Shares in Tata Motors TAMO.BO valued at $9.1 billion, closed down nearly 2 percent at 769.45 rupees, while the main index .BSESN ended down 0.9 percent. ($1=46.5 rupees) (Reporting by Janaki Krishnan; Editing by Unnikrishnan Nair)

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