Small car’s big troubles continue

MUMBAI: For a car that has caught the fancy of the world, getting the Rs1-lakh Nano out on time now seems a Herculean task.


Tata sources say the ball is in the state government’s court. “Should the uncertainty continue, the company will take a call and decide if it makes sense to continue in Singur. Till then, Tata Motors is determined to wait and stick to its original schedule for the Nano rollout from there,” they added.

But its vendor fraternity, which supplies key parts for the Nano, is not as optimistic.
“We will monitor the situation and then reach a decision about installing machinery there,” some key suppliers for the project told DNA. Most of them are wary Tata Motors may relocate the plant if the agitation gets out of hand. “Investments could be over Rs50 crore for each supplier on an average and this would mean a hefty loss at a time when we are coping with high input costs,” they said. Many now feel supply of parts can be done from their plants across India to Singur if tension persists. That this would increase their logistics cost is a “small sacrifice”, they maintain.

And even if Tata Motors decides enough is enough and commissions the project at Uttarakand, as is widely believed, it would take at least six months for the assembly line to be reinstalled in the new facility. This would mean the Nano will hit the roads in the last quarter of the fiscal (Jan-March) and not this October as planned.

Though the company has not officially gone on record with estimates, the Singur impasse has caused production for the Nano to be halved from the original 96,000 units this year to 50,000. Now, it looks this will be down to barely 30,000, though Tata Motors could make up in 2008-09 with over 150,000 cars.