With uncertainty surrounding the Tata Motors plant to build the Nano at Singur, the vendors said they feared financial losses in case they needed to relocate with their client, but asserted at the same time that they they were committed to the project.
On being asked about the possible impact if the Nano plant shifted from Singur to Dhadwad district of Karnataka, all vendors maintained that it was too early to comment but all aimed to shift with the project.
At the recent vendor meet with Tata Motors at Pune, vendors said all that discussions had centered around technical details and no alternate business plan was discussed.
Almost all the vendors that Business Standard contacted said that the project looked delayed now, and that initial production would be lower than expected and this would mean a loss of business.
While the company was targeting a first year production of 2.5 lakh cars, under the current circumstances the figure looked far from achievable.
Some of the vendors said they expected that the volume could be as low as 50,000 cars to begin with, and it would take some time before the peak volume could be reached.
The 290 acre vendor park area in Singur has been the bone of contention of the state government and its opposition as Trinamool Congress wanted around 300 acre land to be returned to 'unwilling' farmers from the vendor park site, while the mother plant over 645 acres could function normally.
Exide Industries, which had developed a customised battery for the Nano, had not started work at Singur site, and did not have any inventory.
It planned to feed the Singur plant from its Shamnagar facility nearby and had developed a facility to produce these customised batteries there.
"In case of a relocation, we would be able to supply batteries to the plant due to our geographical advantage as Exide had plants in North, West and South India. However, the logistics costs could rise", said Paban K Kataky, director-automotive of Exide.
This could mean additional cost but it did aim to raise prices now. Lower volumes would mean financial losses, as Exide was geared to supply at peak volume.
Bosch India, which developed the fuel injection system for the Nano, was undeterred by the possibility of relocation as it could supply components for the car from its Bangalore, Pune and Nasik facilities while it would make brakes on site.
"In case of a relocation our plans remain the same. We supply components across the country as well as overseas from our Bangalore facility", said a company spokesperson.
It did not want to divulge details of investments made and the status of work at Singur site.
Bosch too said supplying at lesser volumes would have a financial impact.
Lumax Industries was ready to start production at its facility in the ancillary park area at Singur.
The Lumax facility at the site could produce 2 lakh head lamps and tail lamps per annum.
The company with seven plants across the country claimed that in case the Singur plant had to be shifted it had a back-up plan ready.
Lumax had two plants in Gurgaon and Dharuhera in Haryana, near New Delhi, three plants in Pune in Maharashtra and one plant near Chennai.
"Tata is one of our major customers and we would follow them wherever they would take the plant", said a senior official in the Lumax finance department who did not want to be identified.
