Tata Motors inks JV with Thai co
Tata Motors has entered into a joint venture with Thonburi Automotive Assembly Plant, a Thailand-based independent assembler of automobiles to manufacture, assemble and market pickup trucks in the South East Asian country.
The joint venture, in which Tata Motors will hold 70% of equity and Thonburi 30%, will see an initial investment of Rs 120 crore and manufacture pick-up vehicles at Thonburi’s facility. The activity is expected to go on stream in a year and both partners will jointly manage the operation in Thailand.
The vehicle will be modified to suit Thai conditions will come fitted with 50% local components initially. This will then be scaled up to to 70-80%. Besides Thailand, Tata Motors is exploring opportunities in Australia but no decision has been taken on the nature of the venture.
The new joint venture will help Tata Motors enter the second largest pickup market in the world after the US. The Thai market for pick-ups has been growing at 20% for the past three years, with sales of 4.76 lakh units in 2005-06.
For the April-October ‘06 period, though, sales have fallen 24% at 2.4 lakh units. However, sales of these trucks usually pick up in November-February, and growth in the current fiscal is expected to be in line with that of previous years.
“We hope to sell 30,000 vehicles in Thailand on an annualised basis, three years after production has started. Thailand is a tough market with Japanese and American players, but we hope to offer a value for money proposition, which should help open up the market,” said Ravi Kant, MD, Tata Motors.
The vehicles will also be exported to other potential markets in the region, confirmed Mr Kant. Though the JV will kick-off operations selling a single product it is likely to diversify and offer a broader product range. Tata Motors is planning to launch a new pick-up vehicle next year based on its global truck platform which will also make its way to Thailand later.
Tata Motors’ Thai partner Thonburi is one of the largest independent assemblers in Thailand, and currently assembles passenger cars for Mercedes Benz. It produced 4,150 passenger cars and 250 buses in 2005 with net revenues of $208m. The group has over 2,000 employees.
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