Oct 17, 2008

Business - India;Major launch of Nano in second half of 2009

The major launch of Nano would be in the second half of next year, vendors of the Tata Motors were told at a meeting held in Mumbai on Thursday.

Although Tata Motors officials maintained that it is a customary annual event, a number of issues concerning the suppliers are believed to have been discussed during the meet. About 100 vendors attended the meet.

It is learnt that the vendors associated with the Nano project were assured that their grievances, including the losses due to relocation of facilities from Bengal to Gujarat, would be settled. A separate meeting of Nano vendors was held in the morning followed by a general meeting of vendors in the afternoon.

The vendors were told that there would be a soft launch of the car by the end of this year and a major launch would be in the second half of the next year, said a supplier who attended the meet. Vendors were told that things regarding the implementation of the Nano project would be clear by the end of this year, he said.

About the review of terms against the backdrop of escalation of input cost and interest rates, another vendor said “discussions on review of contracts were on an individual basis. Tata Motors have compensated for the input cost hike to a great extent. Recently it has come down a bit.”

About the grim situation in the automotive market, Tata Motors told its vendors that the company expects that 2010 would be a good year. “Things would show signs of improvement from the middle of 2009 and will return to good times in 2010. The current slump is part of a cyclical process,” vendors were told.

A cross section of suppliers admitted that the company’s sourcing of parts have substantially come down in passenger car and truck segments in the recent months.

Tata Motors, which had started work on the Nano plant at Singur in West Bengal, suspended work on the plant citing continued agitation against the project. On October 7, the company signed an agreement with the Gujarat Government to set up the plant at Sanand, near Ahmedabad. It said it would explore the possibility of manufacturing the Nano at its existing facilities at Pune and Pantnagar, and launch the car in the last quarter of this financial year. The Nano was originally scheduled to be launched in the quarter beginning October.

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