Tata Motors is setting up a car assembly plant in Venezuela. It will be Tata’s first overseas car assembly unit.

Though Tata Motors has nine commercial vehicle (CV) plants overseas, so far it has none for passenger cars. With the Venezuela plant, Tata aims to penetrate the 4.5 million unit South American passenger car market.

An announcement on the new plant is likely by September. The car assembly plant is expected to have an initial capacity of 20,000 units a year.

Recently, several Indian automakers have been considering the vast opportunity in South America. Mahindra, which already operates a car assembly plant at Manaus, in Brazil, is considering a new and bigger plant closer to Sao Paulo or Rio de Janeiro.

Hero MotoCorp also recently started work on a two-wheeler unit in Colombia. It plans to enter Brazil in 2016 and may even consider setting up a plant over there.