Monday, 30th October 2017

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'No Plan B' but plenty of alternative plants

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  • Published 23.08.08

Mumbai, Aug. 22: The Tatas have strenuously denied it, but is there a Plan B that they could quickly activate if they decided to pull out of Singur?

On Friday, Ratan Tata was emphatic: “There is no Plan B at this time.”

But the Tatas have been equally emphatic that the Nano — four years in the making — will roll out sometime in October.

Observers reckon that the Tatas won’t have to go looking for a new location as they have plants that could easily churn out the Nano.

The best bet is the plant in Pant Nagar, Uttarakhand, where Tata Motors makes the Ace — the small pickup vehicle. The plant, spread over 1,000 acres like Singur, has the capacity to produce 2.25 lakh units and currently uses about half of it.

Various state governments are expected to soon start pitching for the small-car project with the Tata group chief sounding a clear warning over Singur.

Since the protests began in Singur, the Pant Nagar facility has been touted as the alternative site.

Senior Tata Motors officials have indicated in the past that though there were no plans to make the Nano there, the plant had a built-in flexibility to accommodate other vehicle platforms.

An added advantage is that Uttarakhand offers significant tax breaks like income-tax exemption for the first five years and a waiver on central excise duty.

Tata Motors has manufacturing units at five locations. These include Jamshedpur (822 acres), which produces trucks and engines, and the Pune unit, which is spread over two regions — Pimpri (800 acres) and Chinchwad (130 acres). This site makes passenger cars, utility vehicles, medium commercial vehicles and heavy commercial vehicles. The prototypes for the Nano were developed in Pune.

It has a 600-acre plant in Lucknow that specialises in designing and manufacturing low-floor and CNG buses and is setting up a unit at Dharwad (900 acres) in Karnataka to make luxury buses and vans.

“While Uttarakhand is a clear favourite, Tata Motors could also choose Dharwad. The Nano may also be made in small numbers in Pune,” said an analyst who did not wish to be identified.

A company spokesperson refused to comment on the alternatives, citing Tata’s statement that there was no Plan B as yet.

However, sources said if Tata Motors had to quit Singur, an alternative location would have to be found. “The small car has to be produced,” a source said.

Vaishali Jajoo, an auto analyst with Angel Broking, said it would be difficult to quantify the losses that Tata Motors would suffer if it were forced to pull out of Singur. “While the company has invested around Rs 1,500 crore, some of the assets there will be moveable and some fixed. It is difficult to assess the impact now.”