Tata Motors seeks new sites to make Nano

TATA Motors sought new sites for its cheap car plant yesterday after protests forced it to suspend work on the project, a crisis seen as a big blow to India's effort to attract investors.

The company, which became globally known when it bought British luxury cars Jaguar and Land Rover earlier this year, hoped to have its cut-priced "Nano" model rolling off the production lines and in showrooms by October.

But analysts say the launch of the groundbreaking vehicle, conceived by Tata chief Ratan Tata to get poor Indians off motorcycles, would be delayed by months if the assembly line was moved to other Tata factories in India.

A Tata statement late on Tuesday fell short of declaring the company was exiting Marxist-ruled West Bengal state in eastern India for good. But it would be "highly optimistic to think of a (swift) return to normalcy at the Singur site", a senior Tata official said.

The announcement shocked business leaders, who warned it would hurt India's image as an emerging economic superpower and viable investment destination.

Investor confidence would be "completely shattered", said Venu Srinivasan, chairman of leading Indian two-wheel seller TVS Motor.

India's most powerful businessman, Mukesh Ambani, chairman of Reliance Industries, has said the protests are "counter-productive for the country's economic growth, its global image as well as our ability to attract investments from across the world".