Tatas drive into Thailand with mini pick-up trucks

Tata Motors has signed a joint venture agreement with Thailand-based Thonburi Automotive Assembly Plant company for setting up a pick-up truck manufacturing facility with a joint investment of Rs 120 crore. The commercial production will commence by October 2007.

The venture company will also help the Indian auto giant to assemble and market its products through its supply chain. The venture will be in the ratio of 70:30 where Tata Motors will hold the majority.

Tata Motors plans to manufacture 12,000 units on a single shift basis and will ramp-up its production to 30,000 units by 2009.

Addressing the press meet, Ravi Kant, managing director, Tata Motors, said, "We have been looking at the pick up market (Thailand) for a long time as it is one of the most important markets in Asia, where every second vehicle sold is a pick-up truck. We would be benefitting from the 3 per cent excise duty levied by the government. We are fortunate enough to have tied up with a good company which has the right knowledge of the local market". Kant added that the vehicle would be branded and sold as a Tata product.

The truck will be 1 tonne pick-up truck, based on a space cab platform, powered by a 3 litre, Dicor engine which will be manufactured locally in Thailand. The localisation content will be 50 per cent initially which could be ramped up to 80 per cent.

Kant declined to comment on engaging the US-based Delphi for possible supply of common rail technology for the engine. Delphi powers the Tata's 2.2 litre engine which is seen on the Safari. The same vehicle would be launched in India in September next year.

On the possibility of further expansion in the region, Kant said, "We are going ahead with this project to see how the market behaves, depending on it we will decide to expand our operations where we may even consider to set up a greenfield project".

The Tatas will be using the existing plant of Thonburi, the company which also assembles passenger cars for Mercedes Benz, for production purposes. Tata Motors plans to fund the entire project by way of equity devoid of any debt.

As there is a considerable presence of international players in the Thai market in the pick-up trucks category, Tata Motors would be pricing the product competitively whereby the company is reffering it to as a 'value for money' car.

Thailand would have FTA's (free trade agreement) with all the ASEAN countries by 2010 and it was also in the process of signing an FTA with China.

Looking at this, the Tatas would get maximum benefits by tapping these lucrative markets which features Singapore and Malyasia and Russia, for its pick-up trucks manufactured from Thailand. The country which sold 4.5 lakh pick-up's in 2005-06, is the second largest market for pick-up's in the world after the US.