India’s Tata Motors scouting for Philippine assembly plant locations

PILIPINAS Taj Autogroup, Inc. (Taj), the local distributor of Indian automaker Tata Motors Ltd., said it is scouting potential sites for an assembly plant.

A local assembly operation comes ahead of a possible law ordering the modernization of public utility vehicles ( PUVs). When enacted, Taj intends to import completely knocked-down units from India and assemble them for the Philippine market.

Taj said its planners are counting on possible incentives from the Board of Investments for a local assembly operation.

Taj vice-president and general manager Arthur A. Balmadrid told reporters at a briefing at Fairmont Hotel in Makati City that the company expects strong demand for small commercial vehicles, estimating demand at about 2,000-3,000 units per month.

“The direction of Pilipinas Taj is to have a local assembly based on the PUV modernization program. If it’s local assembly, there are a lot of benefits. First, it can generate employment, then it will attract foreign investors since there will be a lot of suppliers coming in — parts and components from the suppliers. Also, there’s technology transfer. Of course, as far as aftersales [ go], we are networking right now so this will mean more after- sale services.” Mr. Balmadrid added.

Proposed early this year, the PUV modernization act will require commercial vehicles such as buses, jeepneys and public utility vans to be equipped with global positioning systems, closed- circuit televisions monitoring passengers and the driver, and a speed limiter.

Other features of the act will include monthly benefits and salaries for PUV drivers and extending credit to both vehicle manufacturers and operators.

“There are a lot of dealerships nationwide so [that means that there will be] a lot of service centers. For us, we have nine but it became 10 now since we just opened one in Pampanga last week. Next year we plan to have 10 to 11 more applicants for dealerships,” he said.

While an existing plant would be preferred, Mr. Balmadrid said the group is prepared to set up its own plant.

“As an investor you have to also look if the [ local] assembly is feasible as opposed to those who bring in the cars whole. But for now, local [assembly] is favored since there’s incentives for that,” Taj President Cresencio Vincent L. Fernandez, Jr. said.

Mr. Fernandez added that the group will seek to be admitted to the Motor Vehicle Development Program, entitling the operation to tax incentives by the Board of Investments.

Mr. Fernandez said the engine and transmission will be made in India, but the group is open to local sourcing for other components.

Mr. Balmadrid said he hopes that Tata’s commercial vehicle models provide a better alternative for commuters, offering improved security and more space.

Currently, vehicles from Tata Motors are directly shipped from India where the main manufacturing factories are located. Mr. Balmadrid added that in so far, only Vietnam has a Tata plant in Southeast Asia.

Taj will be promoting its three commercial units, the Ace, Super Ace and SFC 407. The Ace and Super Ace are cargo trucks, while Tata Motors is pitching the 22-seater SFC 407 as an alternative for the jeepney. —