India and Tata to build Nano factory in Burma

Published: 29/03/2009 at 02:59 AM
New Delhi – India’s top truck and bus maker, Tata Motors, is looking to set up a truck manufacturing plant in Burma with support from the Indian government in the form of financial participation.

Press reports in India said on Saturday that it would be the first foray by an Indian automobile company in the military-controlled country.

This new plant will be the third to be operated by Tata Motors in the Asian region. In addition to a plant in Korea, the firm signed a joint venture with Thonburi Automobiles to set up a pick-up manufacturing plant in Thailand in December 2007.

The reports did not speculate on the effect on Thailand of any Tata decision to set up shop in Burma.

According to the state-run newspaper, New Light of Myanmar, officials from Tata Motors met the Burmese minister of energy, Vice-Admiral Soe Thein, on Thursday in Burma to discuss the feasibility of setting up a heavy truck assembly plant there.

The truck project is a part of India’s “Look East” policy, which tries to improve economic cooperation with Asean countries.

For the project, the Indian government will sanction a line of credit of $20 million which would be used in putting up a heavy turbo truck assembly plant in Burma in addition to a component parts production factory by Tata Motors.

Although the details regarding the capacity of the plant were not divulged, the facility is scheduled to become operational by December this year. Tata has made no official statement on its plans.

Analysts believe that the project will provide a fillip to the ailing commercial vehicle business of Tata Motors, which accounts for almost half of the company’s revenues.

Commercial vehicle demand from the domestic Indian market is expected to remain flat or even shrink in coming months, Saturday’s press reports said.

Tata Motors posted its biggest loss in seven years for the final quarter of last year. The company was forced to shut a few of its manufacturing plants to get rid of its excess inventory and align production with demand.

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