Tata Motors to expand Asia-Pacific presence

Mumbai: Tata Motors Ltd, India’s largest automobile maker, will start selling trucks in Malaysia, Vietnam and Australia as part of a plan to strengthen its presence in the Asia-Pacific region, a company official said on Tuesday.

The company’s subsidiary in Thailand will serve as a base to sell to the adjoining markets, which will also help the maker of the Ace and Xenon brands of vehicles to utilize its Thai facility optimally.

“Made in Thailand for pickups is a fairly well acceptable name,” said Ravindra Pisharody, executive director (commercial vehicles), on the sidelines of a press meet to announce season two of the Prima Truck Racing Championship in Mumbai. Thailand is among the largest manufacturing bases for pickup trucks.

Tata Motors entered the Thai market in 2006 through a joint venture with Thonburi Automotive Assembly Plant Co. Ltd, a Thailand-based independent assembler of automobiles, to make, assemble and market pickup trucks. Subsequently, it bought out its partner.

However, slowing sales in the Thai market along with increased competition from Japanese rivals including Toyota Motor Corp. and Honda Motor Co. Ltd has pushed the company to explore neighbouring markets.

Regulations in the Asean (Association of Southeast Asian Nations) region give the firm an advantage, said Pisharody.

Bangkok-based Mayuree Chaiyuthanaporn, senior analyst at IHS Automotive, Thailand, said that imports within the Asean region don’t attract an import tax, helping manufacturers to price vehicles competitively as compared to imports from other regions.

“Within Asean, we have Afta (Asean Free Trade Area). Hence every vehicle produced in the region 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,” said Chaiyuthanaporn.

The Asean region sold a total of 500,000 pickups in 2014. IHS estimates that this will expand to 576,000 by end of 2015. 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 an 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 add heavy and light commercial vehicles in the Thai market. Presently, it sells only 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 be appointing a local partner, which will assemble the 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 auto makers.

Tata Motors presently sells buses and trucks in Europe, Africa, the Middle East, South Asia, South-east Asia, South America, CIS and Russia.

Tata Motors shares rose 3.78% to Rs.559.10 on Tuesday on BSE. The exchange’s benchmark Sensex index gained 1.85% to 28,784.67 points.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.