Tata Bengal plant to make 2 lakh cars

Kolkata, May 17 | Updated: May 18 2006, 05:30am hrs
Tata Motors plans to invest Rs 5,000 crore in a 2-lakh unit per annum car plant at Singur, West Bengal.

According to the final project report submitted by the company to the state government, this plant will be used to produce the Rs 1 lakh car, which is still in the development stage.

Tata Motors currently produces models like the Indica, Indigo and Safari at its 2.25 lakh unit plant at Pune.

Tatas are banking on low overheads, including employee costs, to keep the price of the proposed model near the Rs 1-lakh benchmark set by group chairman Ratan Tata. An average of 1.2 shopfloor workers will roll out every car from the West Bengal plant as against market leader Maruti Udyogs 1.7 workers, says the report. The latters Maruti 800 and Omni would be the closest price competitors for the Rs 1 lakh car, sporting starting tags of around Rs 1.7 lakh.

The report also says that the Tatas have selected West Bengal because of low penetration of passenger cars in that region and its proximity to the north-east, a market which is difficult to address from its Pune plant. The report also hints at using the Haldia port for exports to south east Asia.

The company has selected 1,000 acres at Singur in Hooghly district, near Kolkata for the plant, though an alternative Dankuni is being considered too. Mr Tata is expected to fly down to Kolkata on Thursday to announce the project formally after the swearing-in of Buddhadeb Bhattacharjees government.