With just less than a week left for the launch of the Nano, expectations are growing in Uttarakhand that Tata Motors may sell a majority of its small cars from the hill state only.
This follows a letter from the Uttarakhand government asking the auto major to sell a majority of the Nano cars through its new subsidiary, Tata Motors Distribution Co Limited, which was recently floated at Pantnagar.
Through the sale of the Nano cars and other commercial vehicles which are being manufactured at Pantnagar, the state government is hoping to earn additional tax collections of Rs 100 crore (Rs 1 billion) to Rs 200 crore (Rs 2 billion) through a 12 percent VAT.
Top industry officials are interpreting the opening of the new subsidiary of Tata Motors in the state as a gesture of goodwill by the auto giant, which was given more than 1,000 acre of prime agriculture land at Pantnagar for setting up a manufacturing facility.
Last year, Tata Motors received 20 acres from the state government for setting up its distribution company and an additional 45 acres for expansion in Pantnagar, official sources said. Tata Motors is manufacturing Nano cars from its Pantnagar facility as an interim arrangement following the Singur episode.Meanwhile, the state government has also urged Tata Motors to convert its interim Nano arrangement into a permanent one at Pantnagar, stating that the company must reap benefits of the heavy sops available in Uttarakhand under the special Central Industrial Package 2003. However, Tata Motors officials were not available for comment.