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Tata Motors to meet vendors
S Kalyana Ramanathan in Chennai
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October 13, 2008 10:30 IST

After a gap of nearly a decade, Tata Motors' [Get Quote] senior management will meet the company's parts suppliers this week in Mumbai.

The auto-maker's management, led by Managing Director Ravi Kant, will meet the vendors on October 16.

Confirming the scheduled meeting, a Tata Motors spokesperson said the meeting will discuss, among other matters, the  relocation of the Nano's mother plant and its impact on the vendors.

Tata Motors on October 3 had announced that it will relocate its Nano car project factory from West Bengal's Singur to Sanand in Gujarat over concerns of continuing agitation by Trinamool Congress.

Market sources said several of these auto parts suppliers have formally placed their claim with Tata Motors to either partly compensate them for relocating their ancillary units or increase the price of parts to be supplied for Nano.

Either of these options ought to increase the cost of making the Nano or push the break even point farther than what was originally expected. 

Tata Motors' until now has remained non-committal on whether it would compensate the vendors for the loss suffered on account of moving out of Singur.

"Tata Motors has made it clear to its vendors that the Nano project is as much theirs as it is to Tata Motors," said the spokesperson.

While market sources place the monetary damage to ancillary units anywhere between Rs 250-500 crore (Rs 2.5 billion to Rs 5 billion), it could not be verified.

Some sources among vendors believe that collecting information on losses suffered by them could culminate into Tata Motors making a claim with the West Bengal government.

The priority, however, at Tata Motors now is to ensure that the Nano is in the market by the end of this financial year as suggested by the company's chairman, Ratan Tata, when he announced the relocation of the plant.

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