Tata to cease local assembly

Indian maker will sell pickups by import only

Amid fierce competition in Thailand’s pickup truck market, Indian carmaker Tata Motors has decided to stop assembly of pickups in Bangkok this financial year (ending next March).

The Mumbai-based firm on Tuesday announced that it would sell vehicles in Thailand through imports after ending local production.

For the local facility, Tata incurred a loss of 1.7 billion rupees (823.5 million baht) last year, the parent firm said in a release.

The 500-million-baht Bangkok plant has capacity to assemble 8,000 Tata Xenon pickups and 2,500 Tata Super Mint mini trucks via one-shift operations, according to local unit Tata Motors Thailand.

Tata’s Bangkok facility serves both local and overseas markets, with the Xenon exported to Malaysia and Australia.

Tata hired Bangchan General Assembly Co (BGAC) to run its assembly in Bangkok through a five-year contract that could be renewed every five years.

BGAC, a subsidiary of Phra Nakorn Automobile Co, also assembles Chinese Foton pickups with annual capacity of 10,000 units.

Tata cited several viability issues clouding its prospects in Thailand. The company has undertaken a reassessment of the local business model to ensure longrun sustainability.

“The local business is sub-scale and not sustainable, so Tata has decided to cease the current manufacturing operations,” the carmaker said.

Tata said it would continue to distribute imported vehicles in Thailand with a revamped product portfolio suited to local needs. It also committed to continued maintenance services for local customers as it shifts to the new operating model.

Tata’s local executives declined to give further details about the transition, saying updates will come at the discretion of the parent firm.

At present, Thailand’s pickup market is dominated by Japanese brands, with Isuzu and Toyota making up a combined 66% of market share in the first half of 2018. US rival Ford had a 13.3% share, good for third place.

Tata sold 211 pickups in the first half, a sharp drop of 29.4%. Newcomer Foton sold 18 pickups in the first six months.

Founded locally in 2008, Tata distributes mainly commercial vehicles: small, mid-sized and heavy-duty trucks, plus pickups.

Tata sales in Thailand reached a high point in the company’s financial 2012, with a rise of 0.2% from 2011 to 4,597 vehicles.

Sales then suffered sharp declines, plunging 48.5% to 2,367 vehicles in 2013 and 41.3% to 1,389 in 2014.

Sales fell by 18.7% to 1,129 vehicles in 2015 before rising 19% to 1,344 in 2016.

But sales fell once again in the last financial year to 994 units, a 26% drop.