Pune: The country’s biggest auto maker, Tata Motors Ltd, is considering setting up a new assembly line for the Nano in Pune, seeking to scale up production to meet anticipated demand for the Rs1 lakh small car that launches on 23 March. Bookings for the so-called “people’s car”, billed as the world’s cheapest, open in the second week of April.
Big ambitions: Tata Nano. Ramesh Pathania / Mint
The move comes amid worries that Tata Motors may not be able to produce enough of the cars at its Pantnagar plant in Uttarakhand. Top officials are concerned enough to consider supplementing production with an additional assembly line in Pune, said two persons familiar with the situation who didn’t want to be named.
Tata Motors was forced to relocate the Nano project from Singur, West Bengal, to Sanand, Gujarat, last year because of protests by farmers over land acquisition. The factory in Sanand is under construction.
Production of the Nano is running behind schedule largely because component vendors, who were displaced after the company had to leave Singur, are struggling to keep supplies going from plants across the country, according to three persons familiar with the situation. The three didn’t want to be named.
“The company is also trying to beef up the assembly lines at Pantnagar which were originally made for the Ace commercial vehicle,” one person said. “A passenger car needs very specific fixtures that are tuned to making it and there is a lot of engineering and debugging that has to be done on the existing conveyor lines while assembling of the Nano is on so that, eventually, it can ramp up production volumes.”
In an email response, a Tata Motors spokesperson said: “Tata Motors will answer questions on production, sales and bookings of the Tata Nano on March 23.”
The slow pace of ramping up production means that only between 1,500 and 2,000 units of the car will be ready by the launch date of 23 March. According to schedules given to vendors, the company expects to make 1,000-1,500 units in April, increasing that to around 2,000 in May, 2,500-3,000 in June and reach volumes of 4,000 units only by July. Beginning September, the firm wants to manufacture 7,000 cars monthly.
The company, meanwhile, is considering the feasibility of using land in Pune that Mercedes-Benz India Ltd (MBIL) recently returned to Tata Motors—the land was leased to MBIL by the company—for the new assembly line, one of these persons said.
MBIL has moved into a new plant of its own, but has left the sheds that housed the lines intact so it is possible to erect assembly lines inside without having to construct the buildings. “A decision is likely to be made on this by the end of the month,” said one of the people.
“Even if they do not use the Mercedes building for a new assembly line, the Pune plant already has existing assembly lines for the Indica and Indigo and some extra lines,” said a large vendor to the company.
“It also has a large community of vendors to supply parts quickly, including sheet metal part fabricators, infrastructure that the company will require in terms of modification of the existing lines for the Nano, automation of the assembly lines, robots to assemble the Nano and a pool of skilled engineers to do this job with speed.”
Another vendor said the assembly lines that manufactured the Ace at a rate of 450 units a day in Pune till April last year before production shifted to Uttarakhand are also available, as is a paint shop where Mercedes-Benz also paints its cars.
“If they decide to do it, it can be done in a couple of months’ time with not too much investment, since it will not require putting up completely new infrastructure but just modifications.”
The decision to move to Sanand from Singur had the unintended consequence of leaving the supplier community in the lurch, as many of them had already invested heavily in Singur and were cash-strapped for making fresh investments elsewhere at such short notice.
Now, many of them are left without a place to manufacture the volumes that the Nano requires and are struggling to supply from their existing plants.
Plans to give them land at the new manufacturing facility for the car at Sanand in Gujarat are yet to take shape and it will be months before they can put up new manufacturing lines there.
“We are still to be given any compensation for the investment in Singur and, so, there is nothing we can do just now to give them the required quantities. It is impossible at this point to set up anything at Uttarakhand, because, eventually, production will shift to Gujarat,” a supplier to the company said.
Original plans for the Nano project, in fact, envisaged the car actually being assembled at satellite locations where vendors would supply parts. After the forced exit from Singur, engines and gear boxes for the Nano are currently being made at a temporary line set up by the company at its engineering research centre in Pune.
Another vendor, however, said that even if the company decided to go ahead with plans to assemble the Nano at Pune, it would be logistically a complicated task involving transporting doors, bonnets, the roof and other parts from Uttarakhand to Pune and welding the parts such as engines, wheels, axles into the shell in this location.
“Transporting body panels is an extremely tough task because even the slightest dent and customers won’t touch the car,” this vendor said. “A lot depends on how well the packaging and transportation can be done—and the transportation will cost them money. On the other hand, Sanand is not likely to be up and running before a year and if they need to make volumes, this could be a solution,” he said.