India’s giant Tata Motors sought new sites yesterday to make the world’s cheapest car after suspending work on its plant in eastern India in the face of huge farmer and political protests.
A Tata statement announcing the suspension late on Tuesday fell short of declaring the company was pulling out of West Bengal for good.
But it would be “highly optimistic to think of a return to normalcy at the Singur site in the next few days — nothing has happened in the past few months,” a senior company official said.
PHOTO: AFP
Tata was “leaving the window of opportunity open” for peace to be restored at the nearly complete plant but “we have no choice” except to look for other locations, said the official, who asked for anonymity.
“We have a business to run, deadlines to meet,” he said.
Tata hoped to start selling the snub-nosed car next month for just 100,000 rupees (US$2,264).
But analysts said the launch of the car, billed as the world’s cheapest, would be delayed by months if the assembly line were moved to Tata’s factories in Pune in Maharasthra state or Patnagar in Uttarakhand State.
The plant outside the state capital Kolkata, in which Tata has invested US$350 million, has been shut since last Friday.
The company said that it was unsafe for staff to report for work after they were “violently obstructed.”
Protests against the plant have been going on for two years with activists saying poor farmers were evicted to make way for the plant. But rallies escalated in the past 10 days with demonstrators besieging the plant.
Ratan Tata, chairman of the sprawling Tata Group, who conceived the project as a way to get India’s masses off motorbikes and into safer cars, warned last month he would move the plant “whatever the cost, to protect our people.”
Since then, Tata has been flooded by offers from other Indian states vying to host the site of a new plant.
The announcement on Tuesday shocked the business community, which said it would hurt India’s image as an emerging economic superpower and viable investment destination.
Investor confidence “would be completely shattered as the land was legitimately allotted to the Tatas,” said Venu Srinivasan, chairman of leading Indian two-wheel seller TVS Motor Co.
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