Karnataka may not be best for Nano

Karnataka may not be best for Nano - DHARWAD

Abhirr VP and Varun Kumar / CNN-IBN

Published on Thu, Sep 18, 2008 at 21:42,

MADE IN KARNATAKA? Karnataka joins the list of states who have invited Tatas to a open the Nano plant.

Bangalore The Karnataka government on Thursday offered a 1000 acres of land to Tata motors to set up a plant in Dharwad. Although it may look like a win win situation for both - Tata Motors as well as the Karnataka govt, there are drawbacks which Tatas would have to face if they decide to open the Tata Nano plant in Dharwad.

The Tatas own a Telcon Plant in Dharwad and if things go the Karnataka govt's way then the Nano could be its new neighbor. Chief minister Yeddyurappa sent Tata motors an open invitation to set up a 1000 acre plant.

"I just met Tata Motor's executives and their Dharwad unit will be operational within a month. I've offered them to shift to Dharwad if they want to from West Bengal and I offered them all assistance. Now the decision is left to them," said Karnataka Chief Minister B S Yeddyurappa.

With Yediyurappa going all out to make sure that the Tata's get their plant in Dharwad, it seems to be a win win situation for both. The Tata's get a plant for the Nano and for Yediyurappa they get investment in northern Karnataka.

What makes the Dharwad plant an attractive option for Tatas?

• Dharwad is close to Pune which is the manufacturing headquarter of Tatas.
• The presence of Tata's existing plant for its Marco polo bus unit is another plus point.
• Vendor parks for Tata's commercial vehicles have set up base in Dharwad. Also vendors of Toyota in Bangalore and Tamil Nadu are close by.
• South India constitutes almost 30 per cent of the passenger car market.

However, there are drawbacks which the Tatas will have to consider as well.

• The Tatas will have to start from scratch in Dharwad as most of the technology used in the Marco polo plant cannot be used to manufacture the Nano.
• Regular power supply in Northern Karnataka is a problem.
• Finally the additional investments in Dharwad may push the Nano USP which is it's price beyond Rs1 lakh.
• The final answer on whether or not the Nano will be produced in Karnataka, will be known in the next two months.

Tatas would carefully have to weigh their options before deciding to open the Tata Nano plant in Dharwad.