Tata Motors Thailand, a unit of the Indian carmaker, will set aside 500 million baht for its new assembly plant in Bangkok.
The move came after its 10-year contract with Thonburi Automotive Assembly Plant Co expired at the end of last month.
Chief executive Sanjay Mishra said Tata vehicles -- mainly pickup -- will be assembled at Bangchan General Assembly Co (BGAC) in Bangkok. BGAC is a subsidiary of Phra Nakorn Automobile Co, which assembles China's Foton pickups with an annual capacity of 10,000 units.
He said Tata clinched a five-year assembly contract with BGAC and the contract could be renewed every five years. The plant will start making Tata vehicles this October.
The facility will have an assembly capacity of 8,000 for Tata Xenon pickups and 2,500 for Tata Super Mint mini-trucks, all for one-shift operation.
"Tata will install its assembly lines for two models during May to September," said Mr Mishra.
Until production resumes at the new plant, Tata has about 1,200 Xenon pickups in stock for delivery to customers.
"We are still confident Thailand is a competitive car market, which is why we have invested 4 billion baht in our automotive business here the past decade," he said.
Founded in 2008, Tata Thailand reported strong domestic sales the last fiscal year after contractions the previous three years. Sales for fiscal 2016, which ended on March 31 this year, surged 19% year-on-year to 1,344 units. Exports of the Xenon to Malaysia rose by 17.4% to 297 units for the period.
For the current fiscal year, the company hopes for sales of 2,700 units thanks to an improving local car market. It also targets sales of 300 pickups to Malaysia this year.
