Tata Motors to build new small cars at Sanand by year end

Many facelifts later, the world's least priced car, the Nano, is yet to live up to its promise of being a big volume product for Tata Motors. While the Sanand factory at Gujarat, built solely with the Nano in mind, is capable of churning out no less than 250,000 examples of the hatchback each year, the capacity utilization at the car making facility paints a sorry picture.

With the Nano, Tata Motors is averaging just about 1,000 units per month in terms of dealer shipments. Needless to say, the Sanand plant is simply not being utilized well. The Sanand factory does have a sizeable number of workers (about 2,400 was the number for the initial production of the Nano) dependent on the factory's continued operations for survival.

The factory also hosts a vendor park with a large number of vendors engaged in manufacturing parts for the Nano. The vendors too, employ a significant number of workers. Tata Motors acquired 1,100 acres of land from the Gujarat government to build the Nano-making factory at Sanand. While the factory is spread over 725 acres, the vendor park is housed on 375 acres.

Tata Motors has invested over 2,000 crore rupees in the Nano factory at Sanand. With the Nano's sales not showing any signs of a major recovery, the car maker plans to begin assembling other small cars at Sanand. In fact, such a move could happen as early as the end of 2013, with Karl Slym, the Managing Director of Tata Motors, stating that a new product would roll out from Sanand this year itself.

While news reports, in the past have claimed that the assembly of the Tata Ace and its variants were being considered at Sanand, Mr Slym has hinted that the Sanand plant can be quickly converted to produce other small cars. According to him, the main changes required at the Sanand plant to build new small cars would be the tooling and that this could be achieved quickly.

Mr Slym has also hinted that the small car slated to be produced at Sanand could be based on a new platform. However, considering the fact that Tata Motors's next all new car will arrive only in 2015, Mr Slym's hint of a new platform based small car could be a product firmly entrenched in the car maker's future.

By 2020, the Sanand plant is projected to be operating at full capacity. Notably, the Sanand plant has room for expansion. Tata Motors's initial projections stated that the factory could be expanded to produce up to 350,000 units of the Nano each year. So, Tata Motors is indeed sitting on a manufacturing facility that has the potential to churn out big volumes.

Delving into Tata Motors's plans for the Nano, the car has just gotten a new edition in the form of the 2013 model. A CNG-Petrol dual fuel version of the Nano is due in the next few months. In early 2014, a diesel powered Nano could make its debut in India. With an eye on the future, Tata Motors is also said to be mulling Nano variants with more creature comforts and powerful engine options.

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