Indonesia on Tuesday said auto giant Tata Motors was considering using the country as a base to manufacture its low-cost Nano car.
The company has been carrying out feasibility studies in Indonesia over the past year, surveying the country’s auto market as well as possible plant locations, Industry Ministry transportation chief Budi Darmadi told AFP.
“They have met with us. They say Indonesia has a stable economy, plenty of skilled workers and they see a good future here,” he said. “They’re still exploring. So far, there’s no confirmation if they will produce the Nano cars here,” he added.
Darmadi said an investment by Tata would help develop Indonesia’s auto industry and create jobs in the rapidly developing country of 240 million people.
The government is currently designing a regulation on tax incentives for production of low-cost and green cars and “fiscal incentives will surely be given to companies with beneficial projects”, he added.
Darmadi was unable to confirm reports that Tata decided to shelve its expansion plan in Thailand as Indonesia offered more attractive incentives, or that the company was planning to produce 50,000 Nanos a year at a plant in Jakarta from 2013.
Tata Motors, known for producing lower-cost commercial vehicles, declined to comment, saying it “continuously explores both what could be relevant markets and within them relevant business opportunities.”
It added that its no-frills Nano, which recently went on sale in Sri Lanka and Nepal, will be launched in other “appropriate” countries in time. The Nano generated worldwide interest when it was launched in 2008 at a cost of about $3,000, with Tata touting it as the world’s cheapest car.
In May, Tata reported a nearly fourfold increase in annual profit, boosted by booming sales and strong demand for British brands Jaguar and Land Rover, which it bought three years ago.