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India’s top automotive Tata Motors is shifting a portion of its commercial vehicle production from Lucknow plant to Rudrapur, Uttarakhand to cut costs.
The decision has taken final shape after dithering by the Uttar Pradesh government in conceding to Tata Motors’ demand of incentives promised under the state industrial policy 2006, announced during the then Mulayam Singh Yadav regime.
The policy was scrapped by the successive Mayawati regime in 2007. However, the incumbent Samajwadi Party regime has also failed to honour commitments made during its earlier dispensation.
According to sources, Tata Motors would first shift production of its truck model 3118 to the Uttarakhant plant. Later, the production of another truck model 2518 is likely to be shifted to the hill state to avail of incentives.
The two truck models are one of the best selling products from the Tata Motors stable.
The work on the assembly line in Rudrapur unit is on and the trials would start next month. “The production would start from April onwards,” a reliable source told Business Standard here today.
The shifting of operations to Tata Motors would affect 40 odd local ancillary units, who are also its vendors with collective annual turnover of almost Rs 500 crore.
“If Tata Motors operations shift to Uttarakhand, the state exchequer would take hit of about Rs 500 crore annually in taxes and duties,” Punit Arora, a Tata Motors vendor said.
Arora is also the senior vice chairman of Indian Industries Association (IIA), Lucknow chapter.
Interestingly, the vendors and IIA had written to chief minister Akhilesh Yadav in this regard and met state infrastructure and industrial development commissioner Alok Ranjan, but to no avail.
Tata Motors manufactures about three dozen model of commercial vehicles, including trucks and buses at its Chinhat plant here. It has demanded 20%t capital investment subsidy and sales tax deferment scheme as announced in the earlier policy.
