Small car project is on track, vendors assured

Small car project is on track, vendors assured
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First Published: Tue, Apr 24 2007. 12 25 AM IST
Updated: Tue, Apr 24 2007. 12 25 AM IST
Pune: Tata Motors Ltd managing director Ravi Kant and senior officials of the West Bengal government met key vendors of the company’s Rs1 lakh car here with a rather unusual mission: to clear doubts about the fate of the company’s controversy-ridden small-car project at Singur in West Bangal.
People familiar with last week’s meetings said Kant, accompanied by key officials of the West Bengal Industrial Development Corporation, addressed several concerns that the vendors had about the Rs1,000 crore project. It has been in the eye of a political storm and has witnessed violent protests against the acquisition of land.
Tata Motors has asked over 50 vendors to accompany the company officials to Singur, where the dream project of Tata group chairman Ratan Tata, is set to take shape.
For Tata Motors, the support of the vendor community is crucial at this juncture, especially since the company has been working with them on developing various components for the car for a couple of years now. The select group of vendors will supply multiple components at the lowest cost. They are critical to Tata Motors’ effort to stick to the promised price tag and deadline.
While Tata has in the past said the car would roll out in the first half of 2008, the company has been witnessing a protracted agitation in West Bengal led by Trinamool Congress leader Mamta Banerjee against the acquisition of 997 acres of agricultural land. With the political scenario turning sensitive, following violence in the state by affected villagers and a hunger strike by Banerjee, vendors have been expressing concern over the fact that with just over an year left for the deadline for project completion, there has been little progress on it.
“Most of the vendors are either ready to invest or have already invested in anticipation of the project. They want the project to take off fast,” said one vendor who did not wish to be quoted.
Another person, who wished to remain anonymous, said the meeting at Tata’s Pune plant was a morale-boosting session by Kant. “Photographs showing a 16-km-long boundary wall coming up was shown to the vendors to impress on them that the project is on course, and Kant said the car would be produced in the first half of 2008,” this person said. The Singur plant will go into production in July 2008.
A Tata Motors spokesperson was not immediately available for comment.
Kant also took the opportunity to talk to some of the vendors, who have been dragging their feet over setting up shop in a proposed vendor park, which will come up on 300 acres alongside the car plant at Singur. This same person said several vendors had expressed their inability to invest in yet another plant, especially since some of them have already had to invest at Uttarkhand for the company’s new plant to manufacture Tata’s mini truck, the Ace. While vendors have been complaining about the low prices that the company has been quoting for supplies for its Rs1 lakh car project, Kant is believed to have said that the company and its vendor community will gain in volumes and that will compensate for the low margins.
Tata Motors has started the construction work at the project site after it was given the go-ahead by the west Bengal government in early January. While the Singpur plant will initially assemble the Rs1 lakh car, plans are to eventually assemble the car at four different locations. The Tatas have several manufacturing facilities across India and sources insist that once the Rs1 lakh car becomes a reality, it would be a viable proposition to assemble it in different locations to cater to different markets. The design and styling of the car has already been frozen.
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First Published: Tue, Apr 24 2007. 12 25 AM IST
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