Indian automaker Tata Motors’ plans to make Indonesia its production base for “the world’s cheapest car,” the Nano.
Tata had decided to scrap its initial plan to manufacture the cars in Thailand, where it built two other models for the Southeast Asian market. However, the country’s investment chief said negotiations were already in advanced stages.
Tata was still doing feasibility studies and that the government might give the Indian firm a tax break if the project proved beneficial. Tata hopes to build 50,000 Nanos per year at a plant in the outskirts of Jakarta starting in 2013. It will sell the cars in Malaysia, Thailand and the Philippines as well as Indonesia.
The Nano, launched in India in 2009 amid fanfare for its stripped-down $2,500 price tag, would likely cost about IDR45 million in Indonesia due to higher taxes. Tata was meet Industry Minister MS Hidayat but needs time to test the demand in the market for its products.
Chinese low-cost car manufacturer Geely produces Indonesia’s lowest-priced car, the 1,300cc Panda at IDR98 million. It is eyeing a 300 percent increase in sales to 2,500 units this year.
The Indonesian market is currently dominated by Japanese cars, which comprise more than 90 percent of market share.
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