New player eyes PUV modernization venture in tandem with Tata Motors

Pilipinas Taj Autogroup, Inc. and its partner of Tata Motors, India's largest commercial vehicle manufacturer and among the top 10 globally, will be participating in the government program to modernize more than 250,000 public utility vehicles (PUV) even as it aggressively expands its presence in the country with the launch of a range of commercial vehicle models.

Cresencio Fernandez Jr., president of Pilipinas Taj Autogroup – exclusive distributor of Tata Motors in the Philippines, said they planned to submit to the government two prototypes of their proposed PUVs by September this year.

The new tandem in the local motor vehicle industry may use Tata model SFC 407 as its platform for the modern jeepney.

There are two classifications for the modern PUV: One with 9-22 passengers and 23-33 seating capacity.

Based on the plan, the local group will be the assembler for the truck bodies while the major parts such as the engine and the platform by Tata Motors. Its PUV concept though will still be dieselpowered but Euro-4 emission standards compliant, not electric or hybrid engine vehicles.

Fernandez said they need not put up its own assembly facility but rent out existing but unutilized facility outside of Metro Manila. Assembly of the PUVs, he said, maybe done over a two-year period. “This is still a concept so we don’t have specific cost yet of the modern jeepney,” he said.

Fernandez, however, said they have to comply with the minimum investment of $8-million requirement of the Board of Investments to become participants of the Motor Vehicle Development Program (MVDP).

The PUV modernization program has a timetable of 7 years but the government is fast tracking its implementation to over a three year period.

On Tuesday, Tata Motors and Pilipinas Taj launched a range of commercial vehicles in the country. Through this partnership, Tata Motors will commence the supply of its commercial vehicle models – the Tata Prima Range of Tractor Trailers and Tippers, the LPT range of light, medium and heavy trucks, SFC 407, and the mini trucks range of Ace and Super Ace.

“We used to have only 2 commercial vehicles in 2014. Now, we have a full line up of Tata Motor vehicles in the Philippines," said Fernandez.

So far, Pilipinas Taj distributes a total of 15 Tata vehicle models, including 4 cars and 11 commercial vehicles. All these vehicles are imported from India at 20 percent duty for commercial vehicles and 30 percent for passenger cars as against 0-5 percent duty for those coming from other countries where ASEAN or the Philippines has existing free trade agreements.

Besides Philippines, Tata Motors commercial vehicles are present across several ASEAN markets including Malaysia, Vietnam, Indonesia, and Thailand with manufacturing facilities in Vietnam, Thailand and Malaysia.

Fernandez said they may also source from a Tata unit in ASEAN for some of the models that are imported from India.

Rudrarup Maitra, head international business of commercial vehicle division of Tata Motors, said it took them a long time to enter the Philippine market because they have to prepare everything, particularly the after sales service.

“We do take time because we are here for the long term and for the next generation,” he said.

With strong competition from other vehicle brands with long presence in the country already, Maitra said Tata Motors is presenting a good business proposition to the local market. He emphasized they can compete in the total cost of ownership of a vehicle because its vehicles are “sturdy and state-of-the-art.”

Already, Pilipinas Taj is looking at tripling the 400 unit sales posted in 2016. This will be supported by the establishment of 10 dealerships and new ones in the pipeline.

“Philippines is one of our key markets in Southeast Asia and we are delighted to be a part of one of the fastest growing ASEAN nations. With years of experience in the commercial vehicle business, Tata Motors has analyzed and understood our customers well and are dedicated to providing them with best-in-class products and services. We are confident that through our trusted partnership with Pilipinas Taj Autogroup, Inc., we will be successful in establishing a long-term relationship with our customers,” said Maitra.