Tata Motors plans Nano production for February

Mumbai-based Tata Motors (NYSE:TTM), a subsidiary of the Tata Group, said today it plans to spend Rs 2,246 crore ($453 million) to start production of its Nano car in the western state of Gujarat, doubling its investment in its low-end, highly efficient vehicle.

The Nano—which is being billed as the world’s smallest, cheapest car—is a gas-powered, manual transmission, four-seated vehicle expected to sell in India for one lakh ($2,500 USD) (see Hyundai introduces competitor to India's Nano minicar). 

Tata chose Gujarat for the Nano plant after violent protests halted construction of the factory in Singur, West Bengal, in August when it was 90 percent complete (see Tata Motors moves Indian Nano plant). In addition to the Rs 2,246 crore to build the new factory, Tata said the shifting and relocation of the Nano plant will cost Rs 650 crore.

Tata now says it plans to roll out the Nano starting in late February from its existing factories in Pune and Pantnagar, with about 7,000 vehicles produced by the end of the fiscal year on March 31. The company then plans to produce 80,000 Nanos in its next full fiscal year.

The Sanand facility in Gujarat is expected to come online in the first quarter of fiscal 2010-11, with Tata aiming to produce 150,000 a year, which was the initial goal for the Nano before problems arose with the Singur factory. The original rollout of the Nano was planned for October 2008.

Last year, Tata said it spent nearly Rs. 1,500 crores ($338 million) to build the Singur factory, 45 miles outside Kolkata. About 60 suppliers collectively spent about Rs. 500 crores ($112.7 million) to locate on the Singur complex (see India’s Tata Motors reveals electric car prototype).

Residents held violent protests demanding the return of 400 acres of land that farmers said they were forced to cede for the factory.

See the Tata Nano here>>

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