Tata Africa Holdings, a subsidiary of Tata International, is planning to set up a motor vehicle assembly unit in Kenya to enhance presence in the east side of the continent.
Tata Africa plans to assemble pick-ups and light commercial vehicles to compete against Chinese and other international manufacturers, the Business Daily newspaper said.
“At this point of time, we do not wish to comment on this,”a Tata Africa Holdings spokes-person told DNA Money.
Currently Tata Motors operates in Africa through Tata Motors (SA) (Proprietary), a joint venture with Tata Africa Holding (Pty) Ltd.
However, it is not clear whether the new assembly plant in Kenya will be a joint venture project between Tata Motors and Tata Africa.
As per the its website, the company plans to spend 2 billion Kenyan shillings (approximately Rs.100 crore) on the new assembly plant.
Tata Motors’ pick-ups and LCVs are one of the strongest emerging brands in the region.
Africa is becoming one of the important markets for global vehicle manufacturers.
Tata competes with Chinese rivals such as Chery Automobile and Beiqi Foton Motor in the East Africa region, which is currently dominated by Kenya Vehicle Manufacturer and General Motors East Africa.
“We are looking at establishing an assembly plant in either Kenya or Tanzania in the short term, but Kenya appears to have better infrastructure,” Naresh Leekha, executive director of Tata Africa, was quoted by Business Daily.
“Local assembly will give us a price advantage that we expect will lift our market share in the commercial trucks market from the current fourth position to the third position.”
Duties on locally assembled units are 0% against 25% for fully built units. Beiqi Foton is building a $15 million assembly plant in Nairobi while Chery has a $50 million plan.
Comments