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Author: jimpiccard Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 18  
Subject: Re: Tata Motors Date: 2/19/2006 3:25 PM
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I have an indirect stock interest in Tata through one of my larger holdings, Westport Innovations (on the WPT.TO; WPT on the Toronto Exchange). WPT.TO is the world-wide leader--at least right now-- for injectors, controllers, and related technologies to turn diesel-fuel burning engines into 'natural gas diesels'. They also are working on hydrogen injectors with Ford and BMW; natural gas diesels for Japan's small truck delivery market with Isuzu; and with by far their biggest relationship, with Cummins, through their 50/50 Cummins Westport International partnership. CWI is the actual 'operational arm' for westport, both selling, overseeing manufacturing of, etc. the natural gas engines based on a Cummins engine block. BIggest north american customers are Los Angeles basin area transportation companies, Washington,DC Metro, and several others.

CWI has sold 2700 engines so far in China, none (yet) in India. However, as of now, CWI, through Cummins, has established local manufacturing of engines in both China, and India. (The Indian outfit is ready for production and sales right now; the China joint venture, with Dong Feng, later this year). Keep in mind, though, that even without localized Chinese content, they already have 2700 engines on the road in China; most of them in Beijing, which is under mandate to have all buses using alternative fuel vehicles for pollution control by the 2008 Olympics. (Some silly complaint about the athletes needing to breathe or something...). So, all those 2700 in China are the more-expensive North American engines. Beijing's last order--its largest so far--was for over 400 engines 1 year ago. I'm positive on the Chinese market and relationship--in spite of no Chinese orders for a year-- because even knowing that local production in China was coming they still kept ordering engines.

Same with the Philippines, which now has an official policy to get off petroleum diesel and on to natural gas. Instead of waiting for cheaper Chinese-made engines, they ordered 200 North American engines put into some Chinese-made buses they were building, and shipped them. Similar thing in progress with Bangladesh.

Clearly, though, Tata has been making the most noise the past year about them wanting to be the natural gas engine-vehicle maker of choice for Southeast Asia; where, like the Philippines, Bangladesh, China, and india, there is often a lot more indigenous natural gas than their is petroleum. (Not to mention their air quality issues). And Tata very obviously wants to do the same thing inside India. The CWI/Cummins India partnership has joined with Tata Motors for local Indian production. Domestically many cities in India are under court order to move towards natural gas diesels for buses et al; so in that sense the market, not in China, exists by mandate and is going to go forward.

I bought most of my WPT.TO stock at $1.20 (Canadian); so on paper I'm under-water right now. But I gotta tell you the stock is currently under-valued out the wazoo. Their latest conference call:

http://www.westport.com/investor/conference.php

which also has a transcript you can download, hardly sounds like a company that doesn't have a lot of prospects in front of it. The only 'negative' I heard is that they are probably going to have to get more money this year; not because they aren't selling enough--CWI itself is profitable-- but just to continue to fund that portion of their R&D that isn't funded by big brother partners. I don't expect them to have any trouble in coming up with the money. And they drive good deals; for example: the Indian production plant setup--and training for all of its workers--was 100% paid for by Tata Motors (just as the CHinese plant is being paid for 100% by Dong Feng).

Here are three recent articles--there is some overlap between them-- on CWI, India, and Tato Motors:

http://tinyurl.com/n9lsf

http://tinyurl.com/s54n4

http://www.theautochannel.com/news/2006/01/19/207897.html

Any further discussion on this should probably occur on the other more specialized boards:
-- most dicussion on WPT.TO is nowadays on the Canada-Microcaps board (and before that on the Canada-General Board). We've been discussing there since December 2003 or so.
-- The Tata motors board;
-- The India board


jp
FD: own WPT.TO
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