Nanos foreign jaunt likely to be licensed

Tata Motors, which has been awash with Nano-related queries from across global markets, is mulling the licensing route for mass manufacturing the Nano overseas. The company has received enquiries from undisclosed car makers in the US, Latin America, Europe and South-East Asia for manufacturing and marketing Nano in these countries.

Tata Motors circles indicated that the company might consider issuing licences to a particular car maker in offshore markets, who would manufacture the Nano there. Technology-transfer and associated manufacturing expertise issues would be shared by Tata Motors.

Tata Motors vendors would also supply auto components to licenced foreign manufacturers. Sources said: “In lieu of the Nano licence, Tata Motors will get a fee. Existing auto-component makers of Nano will also benefit in the process.” The international manufacturing strategy is slated to crystallise once the Nano is physically available in India.

When contacted, Tata Motors head (corporate communications) Debasis Ray told ET: “We continue to receive proposals from Asia, Africa, Europe, North America and South America for marketing Nano. But Tata Motors is yet to decide the mode of sourcing and in which countries it is going to market Nano. This is because our near-term focus is India, and international marketing will take place after a few years.”

Tata Motors spokesperson, however, did not respond to ET’s specific query on whether the company would licence the manufacture of the Nano to overseas car makers. Interestingly, Tata Motors managing director Ravi Kant had recently indicated: “We’ve received many enquiries from other countries to set up Nano plants. We’ve also received enquiries from people to distribute Nano in overseas markets. Whether it’s the US, Latin America, Europe or South-East Asia, the response for the product has been tremendous.”

Tata Motors vendors, who’ve scaled up activities at their upcoming facilities in Singur, Nano’s international foray will create enormous opportunities for them. Incidentally, some 55 vendors are setting up facilities adjacent to the Nano factory in Singur.

An official of Rucha Engineering, a Nano vendor, said: “Foreign auto makers, including Ford Motor, General Motors, Honda Motor, Toyota Motor, DaimlerChrysler AG, Hyundai Motor Co and Renault are all looking at increasing their presence in India and use it as an export hub. It becomes cheaper for foreign companies to source auto components from India. Whoever manufactures Nanos abroad, it will be cost competitive for him to source auto components from India.

Incidentally, according to auto-component industry officials, the sector is set to grow at a CAGR of 15% till fiscal 2012. With India estimated to have the potential to become one of the top five auto component economies by 2025, the pace is expected to pick up even further.