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Tata Motors assures Karnataka it is in race for second Nano plant

Mahesh Kulkarni  |  Bangalore 

Karnataka may have narrowly lost the race for housing Tata Motors’ Nano car plant but that is not stopping the southern state from nursing ambitions of winning the second round of the same race. It was late last year when Tata Motors announced that it would set up the first plant for producing the Rs 1-lakh car at Gujarat’s Sanand rather than Karnataka’s Dharwad, among other places.

Now, if all goes well, Karnataka will get a chance to play host to Tata Motors’ proposed second Nano car plant in South India. The state government has been assured by the company that Dharwad will be a preferred choice for the company’s plans to expand its Nano manufacturing capacity into South India.

The state government, in turn, has assured the company that it will provide the required land as well as tax concessions, similar to those offered by the Gujarat government, for setting up the second Nano car plant, Karnataka minister for medium and large industries Murugesh R Nirani said.

“When Tata Motors initially came to inspect Dharwad, we had offered them 600 acres within 24 hours and had assured another 400 acres in three months. But the company chose to go to Gujarat for reasons best known to them. However, they have told us, for expansion of their Nano car capacity, they will consider Dharwad and we have promised them all possible help,” he told Business Standard.

Nirani added the state government recently acquired 2,500 acres at Dharwad, adjacent to the existing Tata Motors’ bus plant, where the company had intended to set up the Nano plant. Tata Motors had indicated a requirement of around 1,000 acres.

“We have already discussed this with the company’s higher officials. They have plans to set up one more plant in South India for producing the Nano car and they want to do it in Dharwad because it is closer to Pune, where they have a major presence. Tata Group Chairman Ratan Tata has invited us for further talks in this regard and we will soon meet him,” Nirani said.

Tata is currently manufacturing the Nano at their plant in Pantnagar. Its dedicated Nano car plant will be operational at Sanand in Gujarat by early 2010.

At Dharwad, Tata Motors currently operates two plants to manufacture construction equipment under the Telcon brand name. It also produces buses in a joint venture with Brazil’s Marcopolo. So far, it has acquired 600 acres and employs around 3,500 workers in both the plants. The company has invested close to Rs 500 crore in its bus plant, which started commercial production in January this year.

In addition to Tata’s Nano car plant, the state government is also in talks with Korea’s car maker Hyundai Motors and the domestic utility vehicle major, Mahindra and Mahindra, for locating their new plants in Karnataka.

Recently, the state government approved an additional investment proposal of Rs 800 crore by Toyota Kirloskar Motors at Bidadi, near Bangalore. The government is also planning to hold a special meeting with the automobile industry very soon in Bangalore, as a precursor to its forthcoming global investors’ meet scheduled to be held in January 2010, Nirani added.

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First Published: Tue, September 01 2009. 01:04 IST