Tata Motors to boost presence in Asia-Pacific

Tata’s Thai subsidiary will serve as a regional base for both Tata vehicles as well as the maker of Xenon brand vehicles. 

The Indian auto giant entered the Thai market in 2006 through a joint venture with Thonburi Automotive Assembly Plant, a local independent assembler of automobiles, to make, assemble and sell pickup trucks. Subsequently, it bought out its partner. 

“The ‘Made in Thailand’ stamp for pickups is fairly well acceptable,” Ravindra Pisharody, executive director (commercial vehicles), said on the sidelines of a press conference to announce Season 2 of the Prima Truck Racing Championship.

Thailand is among the largest manufacturing bases for pickup trucks. However, slowing sales in the Thai market, along with increased competition from Japanese rivals, has pushed Tata to explore neighbouring markets. Also, easing regulations in the Asean region has helped, Pisharody said.

Mayuree Chaiyuthanaporn, a senior analyst at IHS Automotive (Thailand), explained that imports within the Asean region were not subject to an import tax, helping manufacturers to price vehicles competitively, compared to imports from other regions.

“Within Asean, we have Afta [Asean Free Trade Area]. Hence every vehicle produced and exported within the region enjoys zero tax,” she said. “As a result, many global auto makers have made Thailand an export hub for pickup trucks for the region.”

The Asean region sold a total of 500,000 pickups in 2014, and IHS expects this number to expand to 576,000 by the end of this year. Of this, sales out of Thailand are expected to rise to 450,000 in 2015 compared to 376,000 last year.

“Tata Motors is likely to benefit from economy of scale,” she added, referring to their plans to use Thailand as an export hub for the region. In terms of products, Tata Motors plans to bring both heavy and light commercial vehicles to the Thai market. At present, it only sells the Xenon pickup truck and the Super Ace small truck.

For the Malaysian market, Tata Motors plans to introduce heavy-duty truck brands Ultra and Prima. The company will also be appointing a local partner, which will assemble kits imported from India. 

Indonesia, which is similar to the Indian market, will also be addressed through exports out of India.

 “Asean will be a big play area for us and Indonesia will be the largest in terms of volume.” Pisharody said, adding that the company hopes to break into the competitive Asean market, which has been a stronghold of Japanese automakers. Tata Motors currently sells buses and trucks in Europe, Africa, the Middle East, South Asia, Southeast Asia, South America, CIS and Russia.