Proposed Tata, Mahindra plants thrown out of gear

TIME CONSTRAINTS: With new projects, car makers could have to factor in issues that might throw a spanner in the works.

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Keywords: Delay, Uttarakhand

Mumbai: Mahindra & Mahindra has just rolled out its 2 millionth car and plans to the third million in less than five years.

However, delays in starting plants on time could hurt plans. M&M'S ready to set up two plants, in Talegaon with International Trucks and in Chennai with Renault-Nissan, but land possession is a hurdle.

They will have capacity of 7 lakh vehicles a year.

Says President Automotive Sector, M&M, Pawan Goenka, "Earlier we were thinking of starting the Chennai plant by June, but it may get delayed by a couple of months and we may start by August. We'll try to make up but we have a tight deadline and it may be difficult to make up."

For M&M the Chennai plant is crucial because that's where its next SUV will roll out from.

Tata Motors is in a similar jam. It started trial production in its Uttarakhand plant when the mandatory environment clearance by the state pollution board to all companies was revoked.

Tata Motors is investing Rs 1,000 crore on the plant, which will make the ace and might also become a satellite plant for its Rs 1 lakh car.

With so much riding on the plant, Tata Motors is relieved now that a Supreme Court judgement has favoured new industrial projects and awaits a certificate of no objection from the state government.

Says Tata Motors MD, Ravi Kant, "All No Objection Certificates (NOCs) in the state of Uttarakhand were suspended. On July 27, SC allowed the state government to issue NOCs, pending final disposal of the case."

Even so, Tata Motors has lost tax benefits and time in rolling out vehicles from Uttarakhand.

With new project numbers increasing, car makers could have to factor in issues that might throw a spanner in the works.