Tata Doubles Nano Investment, Nails Down Production Timeline

Indian auto giant Tata Motors (s TTM) plans to throw an additional $435 million at production of its Tata Nano, the compact car unveiled in prototype last year with the promise of a price tag low enough to revolutionize transportation in emerging markets. With a lightweight design and high fuel economy (54 mpg, Tata claimed), it was envisioned as a precursor for low-cost electric and micro-hybrid models. While the ultra-cheap auto project has stalled, renewed investment could be the jumpstart Tata needs to get efficient cars out of the planning stages.

The investment announced today will pay for a new manufacturing facility for the $2,500 Nano, with production slated to begin in late February. That’s a 4-month delay from the initially slated rollout, which has proceeded by stops and starts amid fierce land disputes. The spending represents a doubling of Tata’s total investment in the Nano project since its launch just over a year ago, Cleantech Group reports. (Tata deserted a 90-percent complete factory in August after violent protests from local farmers who said they were forced to give up land for the project.) According to the Times of India, Tata will have help from the government, which is letting the company buy the land in eight yearly installments, beginning after production takes off.


Here’s the new timeline: Tata expects existing plants to produce the first 7,000 vehicles by the end of March, with production of the so-called “people’s car” ramping to 80,000 over the next year. If the new factory opens as scheduled in the first quarter of the 2010-2011 fiscal year, Tata said it will reach its original full-scale annual production target of 150,000 Nanos.

The schedule shows remarkably few changes from the original plan, considering the tumult Tata Motors and its parent, Tata Group, have endured over the past year. Then again, it wouldn’t be the first automaker to miss its own revised deadlines.