Buoyed by the success of its Ace family of small trucks and vans, Tata Motors is planning to add 500,000 units to its annual capacity within a couple of years, taking its total small commercial vehicle production capacity to over a million.

The capacity addition, which will be in its plant in Dharwad, Karnataka, focuses on expanding its passenger van portfolio.

Tata Motors holds around three-fourths of India's small commercial vehicle market at present. It has a 500,000-units-a-year plant in Pantnagar in Uttarakhand for the sub-1 tonne Ace truck and Magic vans, and recently commissioned a 90,000-unit plant in Dharwad for the half-tonne truck Zip and van Iris.

"We are practically full on capacities in the Pantnagar plant. So we have to create one more capacity particularly focused on the passenger version, in Dharwad in Karnataka," C. Ramakrishnan, chief financial officer, Tata Motors, told analysts in a recent conference call post the company's second quarter results. "Over the next couple of years we will build the capacity to match what we have in Pantnagar. That will be a major investment in capacity."

Ace, India's first mini-truck launched in 2005, has been a highly successful product for the Tatas, crossing a million unit sales in seven years. Tata Motors plans to expand the Ace portfolio with eight new variants.