Tata Motors, one of the largest automobile makers in India has announced that the company has decided to halt manufacturing operations in Thailand, citing viability issues. However, the company would continue to sell vehicles in the country through the medium of imports.
Tata Motors has undertaken a reassessment of its business model in Thailand to make sure that the company is sustainable over the long term. The company clearly told that the decision was taken due to a subscale and unsustainable business in the region.
“The business as it stands today is sub-scale and not sustainable. We have hence decided to cease the current manufacturing operation in this financial year,” stated Tata Motors.
Moving further, Tata Motors also stated that the company would continue to address the Thailand market with a revamped product portfolio, suitable to local market needs, delivered through a completely built unit (CBU) distribution model.
The automobile maker is committed to the ASEAN region wherein Thailand is an important market and the company attempts to continue serving customers as it transforms into the new operating model.
P Balaji, Tata Motors Group CFO said, “It was becoming unviable business for us. Therefore, we decided to cease manufacturing operations.”
He also mentioned that Tata Motors is said to have incurred losses up to Rs 170 crores in the Thailand business last year.
Tata Motors Thailand started to operate in the South East Asian country since the beginning of 2008, in a joint venture with the Thonburi Automotive Assembly Group. The company sells a number of commercial vehicles in the region ranging from the one-tonne Xenon pick-ups to medium and heavy-duty commercial vehicles.