(Bloomberg) -- Tata Motors Ltd., India's biggest truckmaker, abandoned its newly built factory for the world's cheapest car because of violent protests by farmers, hampering plans to start selling the $2,500 vehicle this year.
Tata Motors will move equipment and machinery from Singur in West Bengal state to a new location to be decided later, Chairman Ratan Tata told reporters in Kolkata yesterday. The company has yet to evaluate how much of the 15 billion rupees ($319 million) invested in the project will be lost, he said.
``We have taken this decision because we do not see any change on the horizon,'' Ratan Tata said. The company will strive to meet this quarter's deadline for Nano sales, he said.
Shifting to a new site may hinder Tata's challenge to Suzuki Motor Corp., maker of more than half the cars sold in India, before new entrants including Renault SA start selling low-cost cars. Ratan Tata, 70, conceived the Nano project to lure the nation's 45 million motorcycle and scooter owners to upgrade.
``It's a big setback for Tata Motors,'' said Gaurav Lohia, an analyst at KR Choksey Shares & Sec Pvt., who has a ``buy'' rating on the company's stock. ``I expect the production and rollout of the Nano to be slowing down.''
Bloomberg
