Glimpses Into The Tata One Lakh Car
- Date: 2007-07-21 - Word Count: 384
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Forewarning: These are just my Sunday morning musings on the upcoming Tata small car and not entirely supported by facts.
The prototypes are undergoing testing and the small budget car is reported to be only 20% off its price target. This is a commendable job if the customers get a competent product.
So, how is Tata planning to keep the cost of the INR 100,000 within the target price?
Part I: Buy land cheap. Best, convince the state government to capture it for you and then sell it to you for throwaway prices.
Tata's small car plant in Singur, West Bengal is reported to be coming up on a land which the company purchased at throw-away prices. While the farmers may now be realizing that they have been taken for a ride (the realization no doubt helped by education received from certain political groups), the negative publicity received by the company in the wake of the land dispute is slowly being countered by immaculate press releases that flood my inbox every week. Things like "Tata opening an educational institute in Singur" and "Tata training Singur residents" are the stuff of press releases that the company' well-oiled PR machinery sends to numerous journalists every week. By 2008, when the plant starts churning out cars, Tata will again be the respected name that it is considered to be.
A certain Mamata Banerjee - once a stoic opponent of the Tata Singur plant - is surprisingly silent nowadays. Has she been 'convinced' of the Tata's honorable intentions?
The farmers never mattered anyways.
The way of acquiring land has always been a well debated issue in India. There is no point in talking about SEZs in this space as they have already been written about in various other forums. But, even without SEZs, any mega project - like a car plant - manages to extract the maximum, and some more, from the state governments in terms of sops.
Take the upcoming Tata plant in the state of Uttaranchal. The land was (and I 'guess' it) purchased at INR 225 per-square-metre, less than half the cost of the first allotments in the SIDCUL industrial park. All 1,000 acres of it. Tatas then convinced the state government to waive off the stamp duty as well and then get electricity supply for the plant at rock-bottom prices.
The prototypes are undergoing testing and the small budget car is reported to be only 20% off its price target. This is a commendable job if the customers get a competent product.
So, how is Tata planning to keep the cost of the INR 100,000 within the target price?
Part I: Buy land cheap. Best, convince the state government to capture it for you and then sell it to you for throwaway prices.
Tata's small car plant in Singur, West Bengal is reported to be coming up on a land which the company purchased at throw-away prices. While the farmers may now be realizing that they have been taken for a ride (the realization no doubt helped by education received from certain political groups), the negative publicity received by the company in the wake of the land dispute is slowly being countered by immaculate press releases that flood my inbox every week. Things like "Tata opening an educational institute in Singur" and "Tata training Singur residents" are the stuff of press releases that the company' well-oiled PR machinery sends to numerous journalists every week. By 2008, when the plant starts churning out cars, Tata will again be the respected name that it is considered to be.
A certain Mamata Banerjee - once a stoic opponent of the Tata Singur plant - is surprisingly silent nowadays. Has she been 'convinced' of the Tata's honorable intentions?
The farmers never mattered anyways.
The way of acquiring land has always been a well debated issue in India. There is no point in talking about SEZs in this space as they have already been written about in various other forums. But, even without SEZs, any mega project - like a car plant - manages to extract the maximum, and some more, from the state governments in terms of sops.
Take the upcoming Tata plant in the state of Uttaranchal. The land was (and I 'guess' it) purchased at INR 225 per-square-metre, less than half the cost of the first allotments in the SIDCUL industrial park. All 1,000 acres of it. Tatas then convinced the state government to waive off the stamp duty as well and then get electricity supply for the plant at rock-bottom prices.
Related Tags: cars, automobiles, maruti, auto diary, tata car, tata, automobiles industry
Deepesh Rathore
Research Editor
deepesh.rathore@supplierbusiness.com
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