Tata Motors, India’s third-largest car maker, may set up a plant to manufacture Nano in Indonesia through an alliance. Indonesia is the third-largest car market in Southeast Asia.
According to Bangkok Post, Tata Motors is reportedly in talks with PT Astra International, one of Indonesia’s leading auto makers, to produce the world’s cheapest car. It will be Nano’s first plant outside India.
So far, Tata Motors has been exporting Nano, made at its plant in Sanand in Gujarat, to neighbouring countries such as Sri Lanka and Nepal.
Tata Motors launched Nano in Sri Lanka in May this year and in Nepal late last month. It has exported 825 units to the two countries, according to data from the Society of Indian Automobile Manufacturers.
Both Thailand and Indonesia, which are getting huge investments from global auto companies, have been wooing Tata Motors.
Indonesia has posted 20 per cent growth in auto sales in the last five years. It recorded sales of 764,710 units in 2010. Overall sales are expected to swell to two million over the next five years.
Global car makers such as Toyota, Daihatsu, Honda, Nissan, Peugeot, Mitsubishi, Suzuki and Isuzu are already present there. The market, though similar in many ways to India’s, does not have smaller and cheaper hatchbacks.
Indonesia’s stable political environment and conducive tax structure helped it beat Thailand, where Tata Motors already makes Xenon, its pick-up truck, and Super Ace, at a facility set up in association with the Thonburi Automotive Assembly Plant.
Tata Motors had earlier pulled out of Thailand’s eco-car project, citing reasons such as an unfavourable tax structure. The project was aimed at making a low-emission, fuel-efficient car.
“Given its wide portfolio and objective of expanding the international business, Tata Motors continuously explores both what could be relevant markets and within them relevant business opportunities,” said a Tata Motors spokesperson.
Tata Motors is expected to set up the 50,000 units per year plant near Jakarta. The plant would also cater to neighbouring countries such as Thailand, Malaysia and the Philippines.
Several countries from Asia, South America and Europe have been trying to woo Tata Motors.
“We have said in the past that Tata Motors has all along been conscious that Tata Nano, as launched in India, will be appropriate for other countries as well. Hence, even at the time of its unveiling in January 2008, the company said that Nano will be, over time, marketed in other relevant countries. Accordingly, we have begun exporting to Sri Lanka and Nepal,” said the spokesperson.
Malaysia, Taiwan, Thailand, Turkey, Brazil and Romania are some of the countries that have expressed interest in seeing the car on their roads. This is because it has an immense employment generating potential.
Earlier this year, Malaysia’s Deputy Prime Minister, Muhyiddin Yassin, said Tata Motors Chairman Ratan Tata had shown interest in forging ties with Malaysia’s oldest car manufacturer, Proton, to produce Nano in his country.
Similarly, last year Theodore Huang, chairman of Taiwan’s biggest manufacturer of industrial motors and home appliances, Teco Group, said that Nano could be sold at half the price of the current cheapest car in that country. Huang claimed that Tata Motors officials were keen to launch Nano in Taiwan.
