After positioning firm in different areas and businesses, it has again taken a leap forward in the automobile sector by entering into a new market. The company now will produce “eco car” in Thailand catering to the South Asian and African markets. Seems, it is a never-ending appetite of this 19th century Indian behemoth!
On April 2, India’s largest vehicle maker Tata Motors received Thailand government’s approval for setting up a greenfield facility to manufacture “eco cars” at an estimated investment of Rs 760-1,015 crore.
Thailand had invited investment from carmakers for manufacturing environment-friendly cars and proposed to give tax benefits subject to certain conditions. Toyota and Mitsubishi too have received nod for similar facilities on the same day.
Tata Motors said Bangkok had approved the company’s “green car” manufacturing facility but declined to share the investment details. Sources, however, said investment would be in the range of 6-8 billion Baht (Rs 760-1,015 crore) as the minimum investment criterion is five billion Baht.
Among others who had applied for the project include Honda, Suzuki, Nissan and Volkswagen. Thailand had already permitted Honda, Suzuki and Nissan to establish eco car plants, ahead of the latest round of approval.
As per the criterion for setting up a facility to produce “eco cars”, the vehicle should be with less than 1.4 litre engine and four out of the five engine components would have to be made indigenously there. Another condition for the project was to manufacture one lakh units in five years.
On the type of car that the company would manufacture in the country, Tata Motors (Thailand) Ltd Chief Executive Officer Ajit Venkataraman said, “Both Nano and Indica fit into the criteria. And something in between may also come. It can be anything.” Most of the manufacturers would likely export the cars to the neighbouring countries in the region, as the size of the passenger car market is two lakh units a year in Thailand.
“One of the conditions of applying for the project was to manufacture one lakh units in five years and seeing the number of players coming into the market, it seems everyone is looking to export,” he said, adding that the possible export market for Tata and other players could be Australia, the South-Asian region and the African countries.
Meanwhile, according to a Japanese media report, Tata Motors also plans to list its shares on the Tokyo Stock Exchange to raise funds, close on the heels of acquiring British marquees Jaguar and Land Rover. As per Japanese daily, The Nikkei, the firm is finalising plans to list the shares as depository receipts on the bourse in Japan.
“India’s Tata Motors Ltd is finalising plans to list its depository receipt on the Tokyo Stock Exchange as early as the summer,” the daily said in an article published in its online edition.
After entering into an agreement with US car maker Ford for the 2.3-billion dollar takeover of British luxury brands - Jaguar and Land Rover, Tata Motors had said it was looking to refinance the USD 3 billion bridge loan it had taken to fund the acquisition. Tata Motors’ American Depository Receipts (ADRs) are listed on the New York Stock Exchange.
Earlier, on March 27, Tata Motors had launched its one-ton pick-up vehicle Xenon in Thailand, priced between 5.39 lakh Baht to 6.29 lakh Baht (about Rs 6.86 lakh to Rs 8.03 lakh). The vehicle has been designed and manufactured by Tata Motors (Thailand) Co Ltd, a 70:30 joint venture company between Tata Motors and Thonburi Automotive Assembly Plant (TAAP).
Launching of the vehicle at the Bangkok International Motor show, Tata Motors Managing Director Ravi Kant said, “This is really a special moment for us as this is our first product in Thailand. After doing an extensive research here, we found the country very favourable for investments and have done accordingly.”
The diesel vehicle would be available in two variants - X-tend Cab and Double Cab with four doors. The company may come out with a CNG variant later this year, Kant said.
Xenon has been developed in Thonburi’s plant, which has a capacity of 35,000 units a year. The company currently has about 40-45 per cent localisation in inputs and plans to increase it further.
On its expected sale in the Thai market, Venkataraman said, “In the first year, we are targeting to sell 5,000 units and eventually we are looking to capture five per cent market share in the next five years.”
He said after focusing and developing the Thailand market, the company would export the vehicle to Australia, Malaysia, Indonesia and other ASEAN countries. “Depending upon the volume and demand, we may also set up a new manufacturing facility as the 65 per cent of the vehicles sold are pick-up cars here and the rests are passenger cars.”
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