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Dealers feel jittery as Tatas exit Singur

Sohini Das in Kolkata | October 06, 2008 15:53 IST

As Tata Motors [Get Quote] has decided to shift the Nano plant out of West Bengal, the dealers who were ramping up a new chain of showrooms, christened F-1, are in a fix.

While the F-1 showrooms were to showcase the entire range of passenger cars by the company, the network expansion, especially in the hinterland, was planned to cater to the huge initial demand for the most-awaited car of the year.

The deadlock over the Singur plant had not deterred the dealers from their expansion plans as they expected the car to eventually roll out of West Bengal. They had factored in the delay, but banked on the high demand.

While the demand still remains high, the dealers now fear that the supply could be affected. The ex-showroom price in West Bengal could be higher as well, the dealers said.

The transport cost, value-added tax and dealer margin are added to the ex-factory price (Rs 1 lakh) to get the ex-showroom price. Lexus Motors, the largest Tata Motors' dealership in the region, had bought land and made an investment of Rs 1 crore (Rs 10 million) to set up a showroom at Singur.

Now that the showroom is near completion, the factory itself is being shifted out of Singur.

Lexus has set up showrooms in Barasat, Howrah and Diamond Harbour, and was in talks for a few more in the Hooghly district. It recently completed work on its Krishnanagar showroom.

"If the supply is going to be low, our existing network of dealerships could have served the purpose. We will now monitor the market and demand carefully before making further investments," the source said.

Binod Agarwal, director, Lexus, however, maintained that while this was definitely a setback, they would now focus on the other passenger cars of the company. "The demand for the newly-launched Indica Vista is quite high," he added. Lexus Motors was selling around 200 TML passenger cars every month this year. This was lower than last year's average of 300 cars per month.

Kolkata-based K B Motors has set up two showrooms, one at Kalyani and the other at Alipore. Its plans to open F-1 outlets in Howrah and Hooghly have now been put on hold.

Some of the dealers pointed out that the demand for the car would continue to remain high as long as there is no other car in the same category in the market. A delay of two-three months would not impact the demand, said a city-based dealer, who runs R D Motors.

"We have seen customers waiting for a year for Indica. Nano has already generated a lot of publicity and curiosity among our customers," said a senior official at R D Motors. "Tata Motors is in touch with us to assess the demand in the market and they are keen not to delay the launch any further," the official added.

"Even if the car was delayed by a year or so, in case of a relocation of the mother plant, there will not be any other car in the market in this price-bracket," said Agarwal of Lexus.

Most dealers expected the launch of Nano this year. They, however, claimed that there was still no official confirmation from the company.


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