Nano manufacturing at Singur to start in Q4

Jul, 2008, 0103 hrs IST, ET Bureau

MUMBAI/Kolkata: Tata Motors expects to start manufacturing of its much-hyped mini car Nano at Singur in the fourth quarter of this calendar year. The high volumes of Nano is expected to dramatically change Tata Motors’ market position, reach and visibility, said company chairman Ratan Tata in the latest annual report. The Singur manufacturing facilities would be expanded to meet domestic and global demand in the future.

Mr Tata’s expectation comes amidst the widespread concern about the performance of commercial vehicles and passenger cars in the near future due to higher fuel prices, increased raw material costs and rising interest rates.

Tata Motors, the country’s largest truck maker, is working on new variants of the world’s cheapest car Nano to overcome challenges posed by high fuel prices, which could negatively impact vehicle sales, Mr Tata said.

Tata Motors has also started developing new variants of Nano to meet environmental and fuel price challenges, as also market requirements of several international markets. The move comes in the run-up to the scheduled roll out of the gasoline-powered Nano from Singur.

According to Tata Motors spokesperson Debasish Ray: “Variants mean technologies other than gasoline engine which is being currently used in the Rs 1-lakh car that is slated to be rolled out of the Singur factory during the later part of 2008. He, however, declined to divulge more details on Nano variants.

New variants of Nano are under development to meet the new environmental and fuel price challenges, as also the market requirement of several international markets,” Ratan Tata said in a statement made in the 63rd annual report of Tata Motors.

In the commercial vehicle segment, Tata Motors had registered a 5.5% growth over the previous year, but lost marketshare.

Although the company launched several new models and variants of commercial vehicles last year, it was unable to exploit its full market potential due to inadequate deliveries of powertrains and components from major suppliers. In passenger car segment, delays of the main streamline of the new Indica and Indigo passenger cars contributed to decline in sales and marketshare of the company.

Mr Tata said these challenges appeared daunting, but the year ahead will be no more daunting than the challenges they have faced in difficult years in the past. “The people in Tata Motors who have faced adversity and major crisis have delivered products which were not considered possible and found solutions for situations which have thwarted many an organisation,” Mr Tata added.

Mr Tata also said the acquisition of the Jaguar and Land Rover brands will add “global scale, profits and visibility to Tata Motors, enabling it to take its place in the global auto industry as a credible international automobile company”.

It completed the acquisition of the two iconic car brands from Ford Motor in June for $2.3 billion. To fund the acquisition, Tata Motors is raising Rs 7,200 crore via three separate rights issues, and an additional $500-600 million through an international offering of securities. Mr Tata also said it has to absorb the cost of acquiring Jaguar and Land Rover and deal with their integration during the year.

The company mentioned in the annual report that it had invested Rs 600 crore in its wholly-owned subsidiary Tata Motors Finance and Rs 601 crore in Fiat India in FY08. The company had also invested Rs 179 crore by subscribing to the rights issue of Tata Steel last year that was launched to part finance the steel company’s acquisition of Corus for $12.9 billion.

source:economic times