Saturday, December 8, 2007

Tata foresees Thailand as pickup hub


Tata Motors, India's largest and most fully integrated automobile company, is confident it can succeed in Thailand's pickup truck market, the world's second largest after the United States, despite tough competition from Japanese and American brands and the slow automotive market.

The company also pledged to make Thailand its manufacturing hub to serve the Asean market as many projects are in the pipeline, including an eco-car.

Tata Motors (Thailand) Co, a 70:30 joint venture between Tata Motors and Thonburi Automotive Assembly Plant Co, would introduce a range of one-ton pickup trucks carrying the Tata name in the Thai market next March.

The Tata pickup trucks would be produced at Thonburi's assembly plant in Samut Prakan at full capacity of 35,000 units per year and generate at least 500 jobs.

The project represents about 1.3 billion baht in investment.

Tata Motors may expand into local production of other vehicles in the future.

The pickup trucks would come with 2.2-litre and 3.0 litre diesel common-rail engines, the second generation common-rail technology that saves fuel while delivering high performance.

The company hopes to sell at least 5,000 pickup trucks in the first year of operation and capture at least a 5% share in the pickup truck market over the next five years, said Ajit Venkataraman, the chief executive of Tata's Thai unit.

The Thai pickup truck market is dominated by Japanese brands, nearly 90% by Isuzu and Toyota, with the remainder by American companies.

Mr Venkataraman said he was confident that Tata's products would be well received in Thailand even though the company was a newcomer.

The company is also confident in its Thai partner, Thonburi, which has experience in assembling world class vehicles including Mercedes-Benzes and has a countrywide marketing network.

As well, Mr Venkataraman said the Thai government pledged to lend support to Tata Motors' automobile production, especially after the visit of Deputy Prime Minister Kosit Panpiemras to the Tata assembly plant in India.

''We studied and observed the markets in this region for several years. Thailand is a large auto market, and has high-quality suppliers, a very competent workforce and a suitable environment to nurture investment with good support from the government, '' he said

To instill confidence in Tata products, the company is trying to maximise localisation of components.

Initially, pickup truck production would use 45% local content and at least 55% from local suppliers, mostly Thai-owned and Indian companies.

''Thailand has an excellent supplier base. We have over 40 Thai suppliers who are partnering with us and they now have the opportunity to become Tier 1 suppliers to Tata Motors India as well,'' said Mr Venkataraman.

He said the company was working toward preparing the dealer network for launch in March.

''We will start with 20-25 outlets at the time of launch. We are careful about selecting our dealers.''

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