The Tata group is "looking seriously" at setting up an auto-component or vehicle assembly plant in Thailand as a bridge head into the fast-growing economies of Southeast Asia. Ratan Tata, chairman of the Tata group, said an early candidate for assembly in Thailand could be a pick-up truck made by Tata Motors. "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," Tata said.

Tata joins Bajaj Autos and TVS, which are studying proposals for assembly or component manufacturing in Indonesia, another springboard into the member economies of the Association 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 said company executives have been examining joint ventures with Thai partners, as well as a stand-alone operation. 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.