India's Tata group is "looking seriously" at setting up an auto-component or vehicle assembly plant in Thailand as a bridgehead into the fast-growing economies of south-east Asia.

Ratan Tata, chairman of the vehicles, software and steel conglomerate, said an early candidate for assembly in Thailand could be a pick-up truck made by Tata Motors, the second-largest vehicle manufacturer in India.

"We could be a player in the domestic market, where demand is strong, and use the country as an export base. It is also attractive enough as a source centre for components for India," Mr. Tata said.

Tata joins Indian motorcycle makers Bajaj Autos and TVS, which are studying proposals for assembly or component manufacturing in Indonesia, another springboard into the member economies of the Associatin of Southeast Asian Nations (Asean) trading bloc.

Tumbling trade barriers have encouraged Indian companies to build a presence in the 10-nation Asean, where demand for products such as motorcycles is vibrant. Also, labour costs and productivity are more favourable than in India.

Tata's possible investment in Thailand could hit India's rising status as a manufacturing hub for car parts.

Volvo of Sweden is one of 15 foreign companies that set up purchasing offices in India to source and procure components worth about $1.5bn over the next year.

But analysts and senior industry figures fear only a third of that could be spent because of insufficient and fragmented domestic manufacturing capacity, poor infrastructure that adds to costs and an accreditation process with foreign contract manufacturing partners that can take between two and four years.

Mr. Tata said company executives have been examining joint ventures with Thai partners, as well as a stand-alone operation.

The Thailand initiative would be the first by a Tata manufacturing unit in that country.

When Tata Motors last week rolled out the first of 100,000 modified versions of its Indica sedan earmarked for sale in the UK, what was also being rolled out was a new phase in the ambitious globalisation plans of its parent, the Tata group.

Tata, which will market its best-selling passenger car in the UK under the Rover marque, is a sprawling conglomerate that also makes steel, runs hotels, grows tea, sells shares and writes software code. The group is one of a number of reform- minded Indian companies that is well positioned to capitalise on a new, brighter set of conditions in India - with years of corporate restructuring and a resurgent domestic economy coinciding with export and manufacturing opportunities in east Asia, as well as rising foreign interest in India's white-collar and engineering skills.

Tata is already one of India's more international companies, but its chairman Ratan Tata, believes the Rs.400 bn group must speed up its globalisation plans.

"We must ensure that we are not dependent on India alone," says Mr. Tata, who heads a group heavily skewed to basic industries that is dependent on the domestic economy. "We must expand (our manufacturing) beyond India. That's why this globalisation effort has been initiated."

The move towardsthe UK by Tata Motors, the second-biggest vehicle producer in India, follows the $275m acquisition three years ago by Tata Tea of Tetley, a transaction that remains the biggest foreign takeover by an Indian company.

In July, Tata again broke the mould, hiring a Hawaiian-born outsider to head its hotels unit, which is itching to expand into China.

This year, Tata Consultancy Services, Asia's largest software-services provider, earned $1bnin mostly export revenues, setting the stage for its planned initial public offering.

Yet, as Mr. Tata tells it, these moves are only the beginning. "It is clear the action is in Asia," he said. "China is emerging as the world's manufacturer. What is that telling us? It is telling us to undertake faster globalisation. China features very prominently (in our plans) not so much as an export target, but as a manufacturing and services location."

On China, TCS is leading the way for the group, setting up a "substantial" software centre in Shanghai, which it hopes will serve as bridgehead into Japan and Korea, where expenditure on IT services is high.

Tata is also examining options for an car parts or vehicle assembly unit in China or Thailand.

Indian Hotels, which owns the Taj hotel brand, wants to own or manage hotels in Beijing before the 2008 Olympics. 

" Nothing stands in the way of your investment (in China)." Says, Mr. Tata, arguing that investors prefer China's welcome mix of incentives and quality to India's "high input costs and lower productivity".

Proof is in FDI flows - overseas investment in businesses in China is 10 times greater than in india.

Mr. Tata says Indian business has been held back by years of protectionism that has led to products that lag behind world standards in terms of "price appearance, quality or robustness". Manufacturers must "learn to respond to consumers".

"The issue seems to be to move Indian manufacturing to a world class-level and a useful place to start is subassembly or key component manufacturing by setting up plant overseas," he says.

The opportunities in east Asia are presenting themselves as Mr. Tata's long and painful internal overhaul of one of India's more conservative groups - a restructuring that earned him much criticism from the country's corporat old guard and a market impatient for results - bears fruit. This year, Tisco, Tata's giant steel affiliate, Tata Motors, and TCS - the dominant assets in a group of some 80-odd companies of which 30 are listed - turned in strong performances reflecting greater efficiencies.

"We've endured flak. But what could I do during the bad times (in the 1990s)? I could not close plants and sack people like our counterparts abroad. Therefore you just stand and bleed," "e says.

Though the haemorrhaging has been plugged, Mr. Tata still views the challenge head as Olympina - most notably finding a successor. He is due to hand over contgrol a few months before the Beijing Games in 2008.