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Home > India > Business > Business Headline > Report

Race against time for Tata Motors in Singur

Pradeep Gooptu & S Kalyana Ramanathan | June 13, 2008 02:50 IST

Even as Tata Motors [Get Quote] is racing against time to get its new Singur plant near Kolkata ready for commercial roll-out of the Nano by October 2008, the company may need an out-of-the-box solution to overcome some delays in the integrated plant and component park structure proposed for the vehicle.

Tata Motors plants in Pune and the new one in Pantnagar (Uttarakhand) might be marked as standby options should the Singur facility not be ready by October.

The possibility of a delay in getting the Singur plant ready is perceived by component suppliers, who said the current orders placed by Tata Motors for parts is very small for the booking volumes envisaged at the start of production in October.

"We are getting order for small lots like 50 and 100 units, when the numbers should be in thousands for a car like Nano's and its promised potential," said a source in the auto component industry.

Component suppliers would normally have their delivery schedule from the car maker three to six months ahead of the start of commercial production, the source added.

"When Tata Motors ramps up its production, the entire supply chain must also ramp up. This is not as easy as it sounds," said another source in the component sector.

The official line Tata Motors is taking is that it is well on time to meet the October deadline. A company spokesperson refused to elaborate, but reiterated that the plant was on schedule and barring any major dislocation, the schedule would be honoured.

This had been indicated by Tata Motors head Ravi Kant after the company's annual general meeting, he pointed out.

The anticipated capacity for full-year operation by Tata Motors for the Nano is 250,000 units a year and ramped up to 350,000 depending on the market response.

The site office of Tata Motors office had very few executives, as a visit to the site on Wednesday revealed. Howver, work was on in full swing, with a huge number of workers, trucks, earthmovers and other equipment toiling away inside the fenced-off premise, and welders working furiously all over the site.

The work on the ancillary plants to supply the mother factory assembling the car appeared to be far behind schedule and only limited groundwork has been done on plots marked with company names.

One auto industry expert in Kolkata working on the project said almost all the ancillary units had started working on their plants, but only the Caparo unit that would produce sheet metal for the car appeared to be on schedule.

The body parts could be painted on site or elsewhere if the paint shop was not ready. Incidentally, Tata Motors had paint shops in Pune, Jamshedpur and at Pantnagar.

In terms of product mix, only a third was likely to be the Rs 1-lakh car, nearly 60 per cent the mid-segment car priced at Rs 1.6 to Rs 1.7 lakh and balance -- the top-end Nano --priced at Rs 1.9-2 lakh.

Even at 35,000 cars in six months, production would be roughly 6,000 cars a month and component orders as of June were yet to reflect this, said the sources.

In contrast, Sona Group Chairman Surinder Kapur said that his unit in Singur was getting ready and would be equipped to supply parts for the Nano by the end of July.

Another supplier, Lumax, was setting up a small factory nearby making light assemblies and kits too.

Sources said the main process was dependent on the German company Robert Bosch GmbH, which was supplying the engine and car control systems, and this was on schedule, and engine assembly was already being done on site inside the covered engine shed without the air-conditioning working.

According to feedback from workers outside the unit, trial assembly in other Tata Motors plant sheds were on, using kits brought in from suppliers, some of whom had hired godowns and sheds nearby to support the operations.

Sheds and godowns of Tata Motors were almost ready and car-producing machinery had been installed on schedule, they said, while work on the rest of the factory was on.

A leading Tata Motors dealer in Kolkata said that bookings were likely to open from September-end, backed up the launch in October and deliveries thereafter.


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