Tata Motors Limited of India and local partner Pilipinas Taj Autogroup Inc. plan to establish a vehicle assembly plant in the Philippines within the next three years to become a major player in the jeepney modernization program.
Pilipinas Taj president Jon Fernandez said the two companies were finalizing a plan that would involve bringing cab chassis and engines from India and assembling the body in the Philippines.
“The platform cab and chassis will come from Tata Motors in India, then we as distributor here in the Philippines will co-project this with a body maker. This is where local content will be coming in and for the rest of the parts,” Fernandez said.
The government’s seven-year jeepney modernization program aims to replace 250,000 aging and diesel-fed jeepneys with electric vehicles.
Tata Motors head of commercial operations Rudrarup Maitra said the Indian automotive company was looking at spending more than the required investment of $8 million for jeepney manufacturing. Fernandez said Pilipinas Taj was already looking for a manufacturing site.
Tata came up with two jeepney prototypes–a smaller model with nine to 22 seats and the bigger model capable of ferrying 22 to 30 passengers.
“Both can be designed using our platform cab and chassis,” said Fernandez.
Tata Motors currently has 11 commercial models and four passenger car models in its Philippine lineup.
“They will all migrate to Euro 4 by 2018. And there will be other models that will be added over and above the 15 models. Since India is a right-hand drive market, we’re catching up on the models. We have an edge in passenger cars because they are diesel-powered,” Maiter said.
All Tata vehicles are currently imported as completely built-up units from India. Maitra said despite being slapped duties of 20 percent for commercial vehicles and 30 percent for passengers cars, the brand remained one of the most competitively-priced automotive brands in the Philippines.
“Tata keeps looking at ways to make owning a Tata vehicle more affordable to consumers. We’re hoping that the Asean-India free trade agreement will help lower the price even more. We’re hoping to reach that 40-percent local content requirement by Asean so we can further reduce our pricing,” he said.
Under the Asean Economic Community, trade among Asean members is duty-free. Tata sees this as an opportunity to increase sales and reduce prices once its Thailand and Vietnam facilities hit 40-percent in terms of local content for the Tata models they are producing.
Tata’s facility in Thailand focuses on manufacturing vehicles that are Euro 4 compliant for the right-hand market. Vietnam produces Tata trucks.