By David Isaiah
30 June, 2008
Source: Automotive World
According to Tata Motors' managing director Ravi Kant, the OEM's low-cost small car project, the Nano, has so far incurred a cost overrun of Rs3bn (US$71.4m).
This increase has been attributed chiefly to water logging at its plant in Singur, West Bengal, due to floods in 2007. Tata Motors and component suppliers for the Nano project have since had to invest to raise the level of the land by 1.5m-2m, to avoid future flooding.
"The entire project had been reworked and we are investing Rs20bn in Singur now, which was earlier estimated at Rs17bn," Indo-Asian News Service (IANS) quotes Kant as saying.
Despite the cost overrun, the OEM intends to launch the Nano by 6 October 2008, with trial production due to commence in late July or possibly August.
Kant says the company has been overwhelmed by enquiries for setting up plants and distribution networks in foreign markets, according to a report carried by Business Standard.
Recently, a report carried by another Indian newspaper, The Economic Times, said that Tata Motors had agreed to absorb a significant portion of the cost increases experienced by vendors for the Nano project. The cost difference was primarily due to the rising cost of steel, which has increased by 50-60% since 2007.
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