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Tata Motors, India’s third-largest car maker, may set up a plant to manufacture Nano in Indonesia through an alliance. Indonesia is the third-largest car market in Southeast Asia. Tata Motors is reportedly in talks with PT Astra International, one of Indonesia’s leading auto makers, to produce the world’s cheapest car. It will be Nano’s first plant outside India. So far, Tata Motors has been exporting Nano, made at its plant in Sanand in Gujarat, to neighbouring countries such as Sri Lanka and Nepal.
 
Tata Motors launched Nano in Sri Lanka in May this year and in Nepal late last month. It has exported 825 units to the two countries. Both Thailand and Indonesia, which are getting huge investments from global auto companies, have been wooing Tata Motors. Indonesia has posted 20 per cent growth in auto sales in the last five years. It recorded sales of 764,710 units in 2010. Overall sales are expected to swell to two million over the next five years.
 
Global car makers such as Toyota, Daihatsu, Honda, Nissan, Peugeot, Mitsubishi, Suzuki and Isuzu are already present there. The market, though similar in many ways to India’s, does not have smaller and cheaper hatchbacks. Indonesia’s stable political environment and conducive tax structure helped it beat Thailand, where Tata Motors already makes Xenon, its pick-up truck, and Super Ace, at a facility set up in association with the Thonburi Automotive Assembly Plant. Tata Motors had earlier pulled out of Thailand’s eco-car project, citing reasons such as an unfavourable tax structure.

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