A leading local automobile company has become the official distributor of cars manufactured by Tata Motors Ltd., India's biggest automaker by revenue, in Viet Nam following a cooperation pact the two announced Monday in Ha Noi.

The deal covers car distribution and supply and technology transfer between Tata Motors and TMT Motor Corporation.

Starting in August, TMT will begin supplying commercial vehicles, such as buses and vans, produced by Tata Motors in Viet Nam, before moving on to passenger cars with two to 16 seats.

Tata Motors logos are pictured outside their flagship showroom in Mumbai May 28, 2013. (Reuters)

The Vietnamese company will assemble Tata vehicles and receive technology transfers from its Indian partner in the ensuing phases of the pact.

It is thus likely that the Indian firm’s Tata Nano, known as the world’s cheapest car, will be distributed and assembled in Viet Nam by TMT.

Made and sold in India, the four-door Tata Nano was unveiled in January 2008 with a dealer price of only 100,000 rupees (1,900 US$), according to Reuters.

However, a Tata Nano would fetch below 10,000 $ if distributed in Viet Nam, apparently because of taxes and fees.

The cooperation pact will help Tata Motors expand its network to Viet Nam, while enabling TMT to increase its strength in the country.

The Mumbai-headquartered Tata Motors has auto manufacturing and assembly plants in India, Argentina, South Africa, Thailand, and the UK.

The Tata - TMT cooperation comes at a time when Viet Nam’s automobile industry is under pressure to partially cut and completely lift the tariff barriers against cars imported from other countries in the ASEAN region from now to 2018.

(Source: tuoitrenews)