Tata Motors Philippines Inc., a unit of India’s largest auto manufacturer Tata Motors Ltd., may put up an assembly line in the Philippines to take advantage of an improving economy and a population moving up fast the socio-economic ladder.
“The Tata phase 2 may be on assembly. They’re testing the market here and from what I understand from the local distributor, they’re even short of supply. This means that the company is doing well here,” Philippine-India Business Council chairman Johnny Chotrani said.
Tata plans to initially build vehicle bodies in the assembly plant and import the rest of the auto parts like chassis and engines from India.
Tata has been bringing in vehicles from India in the last two years. Car imports from India carry duties of about 30 percent.
Despite having difficulty penetrating the passenger car market, the company has carved a niche in the local automotive market, mainly heavy-duty vehicles for construction and garbage disposal trucks through local partner Pilipinas Taj Autogroup Inc.
Filipinos are known as a brand conscious market preferring Japanese or American cars.
Tata Motors so far is focused on selling light trucks with plans to bring in big buses.
The company has customized its vehicles to better serve the need of developing countries like the Philippines.
It assembles smaller dump trucks that can penetrate narrow roads and alleys, which are still prevalent in developing countries like the Philippines.
Tata is positioning itself as a brand in between Japanese, which are considered premium, and Chinese vehicles, which are more affordable compared with their Indian counterpart.
Pilipinas Taj director Freddie Raquelsantos is optimistic sales will continue to grow due to the increasing popularity of “Ace” multicab, which accounted for 80 percent of Tata’s sales in the Philippines.
“The small commercial vehicle segment like multicabs is growing because buyers now realize the reliability of the brand new models compared with the chop-chop second hand units,” Raquelsantos earlier said.
He noted that the Tata line-up was better than most imported vehicles because all were Euro 4 compliant.
Parent Tata Motors is a $42-billion company and a leading global automobile manufacturer with a portfolio that covers a wide range of cars, sports vehicles, buses, trucks and defence vehicles.
Tata Motors is part of the $100-billion Tata Group founded by Jamsetji Tata in 1868.