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Page added on August 31, 2008

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India’s little car on crash course

Tata Motors’ plans for the world’s cheapest four-seater car, the US$2,500 Nano, to reach the market in October are in danger of crashing as violent protests over the auto factory site in eastern India’s West Bengal state threaten its production lines.

National Highway-2, or NH-2, connecting Kolkata, the country’s third-largest city, with the national capital of New Delhi, is the latest battleground over the Nano factory site, with protesters alleging that the local communist government forcibly took about 162 hectares of the land from “unwilling farmers”, out of a total project area of 400 hectares.
Protesters want the disputed land returned to farmers. Tata and the local government say it is required by suppliers, which have to

be located next to the factory so that production and transport costs can be squeezed low enough for the car to meet the ambitious sales tag. Wherever the Nano car factory site goes its suppliers have to go with it, say suppliers such as Sona Koyo Steering Systems Ltd.

Protest leaders have rejected talks aimed at reaching a compromise. Meanwhile, the estimated 30,000 protesters besieging NH-2 since August 25 have caused hundreds of long-distance trucks to be stranded on the highway, plunging the region into economic turmoil.

The Truck Owners’ Association of Bengal has threatened to strike if the highway remains clogged, which would further damage a local economy already feeling the impact of the highway blockade. Hindustan Motors, the only remaining automobile unit in West Bengal, put up a closure notice on August 27 due to non-arrival of materials such as tires and glass from neighboring states. Protesters have called for an indefinite agitation at the Nano factory site from Sunday, August 30.

Asia Times

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