Gujarat leads big race for small car

Written by Rohit Khanna | ROHIT KHANNA | Shweta Bhanot | Kolkata, Mumbai, Oct 4 | Updated: Oct 5 2008, 07:31am hrs
Post-Singur fiasco Tata Motors might look at Gujarat as the location for setting up the mother plant for the Nano car project.

Tata Motors officials are looking into the possibility of setting up the mother plant in Gujarat, said a spokesperson of a New Delhi-based vendor. According to him, Gujarat makes more sense for Tata Motors than Karnataka because of the port connectivity. Singur was an obvious choice as Haldia port was near. Nearer port is a preference while finding out location for the mother plant, he said. Gujarat has Kandla port that has handled 16 million tonne of dry cargo and 2000 vessels.

The company may look at a bigger facility in Gujarat than planned at Singur in West Bengal, said another vendor. He added that the facility would come up near Baroda or Surat. The Singur plant was expected to have a capacity of 2,50,000 vehicles per annum, which could be expanded to 3, 50,000 vehicle per annum. The vendor added that this (Gujarat) goes with the companys plan to export the Nano to south-east Asian countries. According to sources in the industry, Ratan Tata said he would relocate the factory to a place which has a congenial environment.

Karnataka has a strong opposition like JD(S) led by HD Devegowda and chief minister BS Yeddyurappa might find him difficult to tackle, a vendor said. According to him, post election, Narendra Modi has tried to ensure a congenial and politically stable environment in the state. Moreover, Gujarat has much better labour situation, he said. Meanwhile, Maharashtra chief minister Vilasrao Deshmukh has invited Tata Motors to set up Nano plant in Maharashtra. Dow Chemicals has been facing resistance in Maharashtra for its chemical experimentation facility in Shinde-Vasuli village. This experience would keep Gujarat ahead while finalising the location for the small-car project, he said.

In contrary, Abdul Majeed, auto analyst and partner, PricewaterhouseCoopers (PwC), said, The world is waiting for Nano and the company has to go fast to cash on the demand. Karnataka where the government already has land stands a definitive chance as the company does not want to waste anymore time.

He said now the issue was not what the car would be priced at and from where it will be rolled out. But it is about volumes. If the volumes do not pick up it will be difficult time for Tatas, Majeed said. Tata Motors has been offered 1,000 acre by the government. The company is setting up plant in Dharward in Karnataka in association with its joint venture Brazilian partner Marcopolo SA to manufacture buses.

It would take at least 15 months to complete the construction work after the land is handed over to Tata Motors. They will look for a place which can offer them a minimum lead-time, a vendor said.

Overall, trade experts reckon that the Nano will initially roll out from other locations as already Tata has mentioned that they might use a makeshift facility at the moment. And when other formalities are complete, they would then decide on the location and this might just give the Gujarat government enough time to complete the land acquisition formalities.