The local partner of Tata Motors Ltd., India’s largest automotive company, said Tuesday it will fund the construction of an assembly facility in the Philippines to produce Tata commercial vehicles.
Pilipinas Taj Autogroup Inc. said the new facility would make the Philippines a major assembly point of Tata commercial vehicles in the Association of Southeast Asian Nations.
Pilipinas Taj president Cresencio Fernandez Jr. said the Filipino company would fund the assembly facility with technical support from Tata.
“This is in line with our intention to participate in the PUV [public utility vehicle] modernization program. The program is a good venue for us to launch assembly operations and make Philippines the Asean hub for our SFC 407,” he told reporters in an interview.
Pilipinas Taj is one of the more than 10 contenders that expressed interest to participate in the PUV Modernization Program. The company has its eyes set on creating the first three of the four types of jeepneys that the government planned to implement under the program.
It already created two prototypes for Class 1 and 2 using the Ace and Super Ace models of Tata that would be featured in the upcoming Philippine Autoparts Exhibition on Oct. 12 at the World Trade Center.
Fernandez said the Philippine assembly facility would cover the production of three Tata commercial vehicles–the Ace, Super Ace and the SFC 407. These vehicles are commercial delivery units perfect for logistics and passenger transport.
Pilipinas Taj vice president and general manager Arthur Balmadrid said that while company would import the power train and engines for the models that would be registered under the modernization program, “the rest of the parts should be locally-sourced.”
Completely-knocked down imports, including other auto parts, come in 0 to 9 percent duty if registered under the Motor Vehicle Development Plan program of the Trade Department while completely build-up units carry 20-percent to 30-percent tariff.
“That’s why we’re pushing for an all-Filipino assembly for this PUV program. We’re conducting trials for the three models until year-end so we can determine what local components we can adopt,” Balmadrid said.
Pilipinas Taj is also coming up with a purely Filipino mini-van that will debut in early 2018.
Almost the size of an L300, the mini-van can be custom-made to fit the needs of the users. It can be fitted as an ambulance, a passenger shuttle, a school service or a delivery van.
Besides the Philippines, Tata Motors commercial vehicles are present across Asean markets including Malaysia, Vietnam, Indonesia and Thailand with manufacturing facilities in Vietnam, Thailand and Malaysia.
Tata Motors entered the Philippine market in 2014 with cars and small commercial vehicles. The low cost of ownership and availability of diesel-fed vehicles appealed to the local market.