Ratan Tata: Gearing up

Calcutta, July 1: The Cassandras are predicting that crude oil will soar to $200 a barrel by the end of 2008. The spooky prospect has sent Tata Motors into overdrive to develop new Nano variants that will meet environmental and fuel challenges.

The auto major, which is predicting a tough year ahead, expects fuel prices to negatively impact its commercial vehicle and passenger car sales.

“New variants of the Nano are also currently under development to meet the new environmental and fuel challenges, as also the market requirements of several international markets,” Ratan Tata, chairman, Tata Motors stated in the annual report of the company.

On the environmental front, several environmentalists have expressed concern over the entry of the Nano at a time when Indian roads are witnessing vehicular congestion and rising pollution levels.

From April 1, 2010, the emission norms will become more stringent in 11 leading cities of the country.

As part of the new regulations, the Bharat Stage IV norms for four wheelers will be in 11 cities and the Bharat III norms extended throughout the country. Tata had earlier stated that Nano would meet all emission standards.

The requirements of several international markets would also entail higher emission standards. “The interesting thing to see would be how they counter rising fuel prices. Much will depend on the innovations that they are able to introduce,” said an auto analyst.

Tough year

Tata said the company would have to complete the Singur plant and launch the Nano in trying times.

“There will be an enormous and unprecedented increase in material costs in steel, tyres and the like and there will be the impact of tighter money supply with higher interest rates. While these are in India, Tata Motors operations will also have to absorb the cost of the JLR (Jaguar-Land Rover) acquisition and deal with its integration,” the statement further read.