Tata Nano Factory Construction Comes To A Grinding Halt
The business fortunes of Tata Motors has taken some sharp turns this year in light of its January announcement that they would build a $2500 car for the Indian 
market. Earlier this summer the upstart automaker got additional press when it completed its acquisition of Jaguar and Land Rover, two British brands most recently owned by the Ford Motor Company.
In many ways these are heady days for Tata as the company emerges from obscurity to the world stage, but inasmuch as Tata Motors is getting some great press, all isn’t rosy with the Indian automaker.
Recently, the company announced that it would be difficult for the company to produce the Nano for $2500 in light of the rising cost of raw materials. Since the beginning of the year, the cost of these materials has risen from 13% to 23% of the car’s price, a cost that Tata may not be able to absorb. Comparatively, American automakers spend 7% of their vehicles’ costs on raw materials.
Now, word is coming out of the Indian state of West Bengal that construction on the Tata Nano factory there has come to a halt. Farmers, who forcibly had their land acquired by the communist-ruled state, are protesting by the thousands, forcing Tata to cease production. Specific threats against company employees have caused many workers to stay at home, shutting the factory down.
The farmers are in a stand off with 3000 West Bengali policeman who are guarding the factory. Their greivance is that they want 160 of the 403 hectares set aside for the facility returned. Tata has countered that the land is necessary in order to set up units for spare parts and component vendors; shifting them to another site would make it difficult to keep the costs of producing the Nano low.
Ratan Tata is threatening to scuttle the project if troubles continue and reportedly is in discussions with other Indian state governments about relocating the factory elsewhere. Production for the Nano was to begin in October.
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