Karnataka wooing two car makers

After losing out on key automobile manufacturing projects like Tata Motors' Nano car, the Karnataka government is doing its best to emerge as the next hub for making cars in the country. The government is talking to two large global passenger car makers, including Sweden's Volvo Cars, to set shop in the state, sources in the department of commerce and industries said. They did not reveal who the second car maker would be.

According to sources, Volvo Cars might set up a plant in Narasapura, about 50 km from here, in the Kolar district.

M N Vidyashankar, additional chief secretary, department of commerce and industries, confirmed the talks but declined to reveal which companies the government was pursuing.

The state is home to factories of Japan's Toyota, Volvo trucks and buses, Sweden's Scania and Tata Marcopolo, among others. The government is developing Narasapura as a hub for car makers. Already, Japanese two-wheeler giant Honda has a plant for motorcycles and scooters there, with a capacity of three million units a year. Recently, bus and truck maker Scania opened an assembly plant there. Mahindra Aerospace has also recently opened an aircraft parts factory in the town.

Vidyashankar said the government has received a proposal from companies such as NPR of Japan for setting up an auto parts unit at Narasapura at an investment of Rs 170 crore. Recently, the government approved a proposal from Japan's Toshiba Electric for a parts unit at Rs 290 crore there.

Besides passenger car makers, the government has received a proposal from Hero Motocorp, India's largest two-wheeler maker, for a new plant at Dharwad in the north of the state. The company has proposed to set up its sixth two-wheeler factory at Mummigatti near Dharwad. It aims to invest Rs 1,700 crore to set up a plant with an annual capacity of six million units over four lines.

Hero Motocorp has indicated it required 500 acres for the plant along with a park for units of its 40 vendors. A state committee, headed by chief minister Siddaramaiah, is likely to approve the proposal later this month, Vidyashankar said.