Nano output will be a trickle this year

With the curtains down on Singur, Tata and its ancillary suppliers will now have to pull out all stops to ensure smooth production and delivery schedules for Nano.

There has been a huge setback already. The company had initially planned to produce nearly one-lakh cars this financial year which was later halved. Now, it looks as if barely 15,000 Nanos will roll out till end-March 2009.

The first step, of course, is for Tata Motors to choose its new plant. It already has three concrete offers from Gujarat, Karnataka and Maharashtra and top sources have confirmed to DNA that Gujarat is right on top of the list. It has the best in terms of ports, roads, power, water and, most importantly, zero labour trouble.

The site is reportedly less than 100 kilometres from Bhuj which means proximity to Mundra and Kandla Ports. The other important automobile resident of the state is General Motors with its plant in Halol near Vadodara.

The interesting part of the Nano business plan is a mother plant which will produce the cars and supply kits to satellite units in strategic parts of the country for easy distribution.

Gujarat, as the mother plant, would meet the needs of the western region while Uttarakhand and Dharwad (which produce the Tata Ace pickup and Marco Polo buses respectively) as satellite plants would ideally service the north and south.

The critical link in the Nano plan involves the 55 ancillary suppliers whose 300-acre cluster in Singur was the bone of contention in the tug-of-war between Mamata Banerjee and the WB government.

These vendors have already lost an estimated Rs500 crore but hope to get this compensated by the Tatas. Given the current slowdown, none of them would be ready to make any fresh investment in Gujarat and would much rather supply parts from their existing plants.

“Paying more for transport costs is better than setting up a new unit. We would rather have large warehouses for stocking parts which can be delivered to the plant on a just-in-time basis,” a top supplier for the Nano said. For the moment, however, Tata Motors has sought delivery of parts to its Uttarakhand plant while engine components will be diverted to the Pune facility. Eventually, completely assembled Nanos will emerge from Uttarakhand towards end-November though numbers will be really modest at 3,000 units a month.