The Hindu Business Line : Parts suppliers support Nano’s move to Gujarat

New Delhi, Oct. 7 Auto component suppliers to Tata Motors’ Nano expressed their willingness to move to Gujarat to help roll out the world’s cheapest car, shrugging off investments made in Singur.

Component suppliers were quick in responding to the company’s announcement on Tuesday to relocate to Sanand, stating that they would extend their support for the timely launch of the model.

The response of suppliers comes at a time when the domestic automobile industry is fighting margin pressures amid a sluggish demand, and has been looking at ways to mitigate the low order books.

These suppliers are now hoping that mass market appeal of Nano would bring in the volumes to rev up demand.

Plus points

“Gujarat is a very investor-friendly State. While we have invested about Rs 10-12 crore in Singur and we are assessing the impact of how we can absorb the losses, at the moment it is about supporting Tata Motors,” said Mr Arvind Kapur, Managing Director, Rico Auto.

When asked if there were any incentives offered to the vendors, he said he was not aware, but they had requested the company to provide some incentives.

Similarly, Amtek Auto too, which has invested in Singur, said it was ready to move to Gujarat.

“We will move now to Gujarat. The investment could be in the range of Rs 50-60 crore,” said Mr Santosh Singhi, Chief Financial Officer, Amtek Auto.

Proxmity to maharashtra

The proximity of Gujarat to Maharashtra, which is also an auto hub, gives respite to some component suppliers such as Minda and Endurance who have production facilities in Maharastra from where they could supply.

“I think the project is going to do well. To us, our freight cost may turn out to be lesser. Earlier also, we were not investing in Singur but were supplying from Pune and Manesar. So we would continue to do so and later on depending on the volumes we would decide on our investment,” said Mr N.K. Minda, Chairman, Minda Group.

Some yet to decide

Some of the suppliers such as south-based Rane Steering System and Maharastra-based Endurance Group are yet to take a decision and would review the existing capacities at their manufacturing locations.

“We will not be able to tell you as we are yet to take a decision. However, we can supply from our existing locations,” said Mr Biswajit Choudhury, Group General Manager, Endurance Systems.

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