New Delhi: The Egyptian government has asked Tata Motors Ltd to set up a manufacturing facility in the country to make left-hand drive versions of the world’s cheapest car for sale in the local market and West Asia.
“Egypt is seeking consent of Tata for left-hand drive Nano to be produced in Egypt, where a huge market is expected not only internally, but in the left-hand drive market in the Middle East and in Europe,” said Mohamed Higazy, Egypt’s ambassador to India.
A Tata Motors spokesperson said it was premature to comment on this.
“While Tata Motors has said that the Tata Nano and its variants (such as the Tata Nano Europa) will also be introduced in other countries, the company has not decided on its manufacturing strategy (in other countries), let alone Egypt,” said the spokesperson in an email.
Tata Motors has a presence in Egypt where it sells trucks and buses. Higazy insisted that Tata Motors would definitely consider the government’s proposal after the initial phase of the launch of the Nano. “They are looking into it. We proposed it to them. It is a private proposal. Their dealers in Egypt would like to have an assembly line because of many reasons—its social implications for small and middle class consumers.”
In March, at the Geneva Motor Show, Tata Motors chairman Ratan Tata unveiled a version of the Nano that met European safety and emission standards. The firm plans to launch this version in Europe by 2011.
“If components are shipped from India, setting up an assembly unit in Egypt makes sense as it would help the company save on transport costs,” said Vaishali Jajoo, an analyst at Angel Broking Ltd.
Egypt has a population of around 84 million and recorded a gross domestic product (GDP) growth of around 6.9% last year; its per capita GDP is around $5,400 (Rs2.5 lakh).
Egypt’s location provides Indian companies an opportunity to cater to West Asia, Africa and Europe. Indian investments in Egypt are valued at $2 billion. Indian firms operating in Egypt include the Aditya Birla Group, Indian Farmers Fertiliser Cooperative Ltd, Essar Group and Kirloskar Brothers Ltd, among others.
In 2008-09, Indian exports to Egypt were Rs6,571.45 crore, and comprised 0.94% of the total Indian exports. In comparison, Egypt’s exports to India were Rs8,047.49 crore, and comprised 0.67% of the country’s total exports.
During commerce minister Anand Sharma’s visit to Egypt last month, an agreement was signed for setting up an industrial park in that country, which would serve as a hub for the activities of Indian firms.
India’s car market is expected to touch 2.2 million units a year by 2010, according to the Society of Indian Automobile Manufacturers.
Samar Srivastava contributed to this story.