Tata Motors has signed a vehicle assembly agreement with Thailand's Bangchan General Assembly Company, as it looks to maintain its presence in South-East Asia's largest pickup truck market.

The new five year deal, which can be extended for additional periods of five years, replaces the 10 year agreement the company had with Thonburi Automotive Assembly Plant Company which expired at the end of last month.

Bangchan General Assembly is a subsidiary of Phra Nakorn Automobile Company, which assembles Foton commercial vehicles in the country.

Tata Motors said it has set aside THB500m (US$14.5m) to tool up Bangchan's assembly plant located just outside Bangkok.

Tata Motors (Thailand) CEO Sanjay Mishra told local reporters it is setting up production capacity for 8,000 Xenon pickup trucks and 2,500 mini trucks per year at the Bangchan plant with operations scheduled to start in October.

In the meantime the company said it has 1,200 Xenon pickup trucks in stock to supply the ASEAN market. The company also exports the Xenon trucks to Malaysia and Indonesia.

The company sold around 1,620 Xenon pickup trucks in South-east Asia last year, including 920 in Thailand, 500 in Malaysia and 200 in Indonesia.