The board of Tata Motors on Monday approved raising up to $500 million in long-term resources overseas.

The funds will be used largely for product development, including developing new trucks and passenger cars, and for refinancing loans raised for acquiring Daewoo's commercial vehicles business in South Korea.

The company has, however, not decided on the timeframe for raising the funds and their deployment, for which a separate board-level committee has been set up.

 "The plan to raise funds is aimed at maintaining our leadership position in India and for going global with newer products," Tata Motors executive director Pravin Kadle told Business Standard.

Apart from working on its existing range of trucks, Tata Motors is developing a "truck of the future", which is likely to be launched in Europe by 2007 and is part of Tata group chairman Ratan Tata's efforts at making the group global.

In the passenger car business, Tata Motors is known to be working on a new platform for a utility vehicle and newer variants of the Indica.

Both the Indica and the three-box sedan version Indigo have been runaway successes, while an Estate version of the Indica is slated for launch in the next few months.

The Tatas recently signed a deal to buy Daewoo Commercial Vehicles in South Korea for $102 million, of which almost a half will be put in by Tata Motors as equity and the rest in debt.

With Daewoo's help, Tata Motors hopes to increase its international presence.

The company has taken several steps to cut costs and is understood to have saved over Rs 900 crore (Rs 9 billion) in the last three years.

Tata Motors has seen a sharp turnaround in its fortunes over the past year, with the sales of its trucks and passenger cars rising sharply. During April-December 2003, its turnover almost equalled its earning in 2002-03, while profits more than trebled to Rs 517 crore (Rs 5.17 billion).