TATA reiterates financial strength

"We are committed to Thailand and we will continue all projects that were planned. The eco-car project is on track and the product will be launched in 2012. We will make a new investment announcement by 2010," CEO Ajit Venkatraman said.

Following the failures of giant US automakers General Motors and Chrysler, fears are spreading that others would follow suit as automobile demand has not yet picked up.

With export and domestic orders drying up, local production is expected to fall to 940,000 units this year, well below the 1.4 million peak.

Volvo Car (Thailand), which is welcoming its first local president, will switch off its assembly line for the rest of this year, as it expects to sell only 500 vehicles, down from 560 last year.

Ajit said Tata was holding talks with the Board of Investment about the requirements for the government's eco car promotion scheme.

After the economic crisis, all six carmakers that had committed to producing the eco car want the government to relax the 100,000-unit annual minimum volume.

That level would mean a total supply of at least 600,000 units, for which there might not be enough demand, considering the economic conditions in foreign countries in the years to come.

The company also said the Nano car being sold in India would not be the eco car.

The world's cheapest car, the Tata Nano, is too small to meet the criteria for the eco car in Thailand.

The eco car would most likely be a new product that is smaller than the sub-compact Indica, but larger than the Nano.

Sales of the company's Xenon pickup truck have been on the rise. About 100 units are moving per month, up from 50 units earlier in the year.

"We're focusing on stable growth and the long term. Sales for our CNG pickup, which will start delivery in July, have been growing as people get more used to the idea of having a pure CNG pickup," Ajit said.

The company will start exporting the Xenon later this year to an Asean market, although it has not yet specified which one. This will be the second market for Tata in Asean after Thailand.