Tata Motors borrows $3 b to buy Jaguar, Land Rover

Tata Motors has secured a $3 billion loan from Citigroup and J.P. Morgan Chase to finance its intended purchase of the British marques Jaguar and Land Rover from their American owner Ford Motors, according to media reports Tuesday.

The Wall Street Journal (WSJ) quoted a person familiar with the deal as saying Tata had secured a one-year bridging loan from the two banks.

Tata Motors are thought to have made an offer of around $2 billion to purchase the two luxury brands, and the deal is now expected to go through sometime next week, the paper said.

Other reports said money from the loan would also be used to finance the production of the recently launched Tata Nano, the world's cheapest car.

The WSJ said the deal could be signed as soon as next Monday.

But because Ford employees are off work Monday, a formal announcement could be made Tuesday or later in the week, the paper quoted "people familiar with the situation" as saying.

However, earlier reports in The Times newspaper had said the deal would be signed sometime around Easter, which falls on March 23 this year.

Ford said in a recent government filing that it expects the sale to be finalised with regulators sometime during the second quarter

A Ford spokesman said the company is "pleased with the significant progress" in the negotiations and that the two sides remain "on track" to reach a deal early this year. "There are no major roadblocks," the spokesman added.

Tata Motors tells parts vendors to speed up delivery for Nano

Concerned about potential labour shortages amid continued grass-roots opposition and a slow pace of work on buildings, Tata Motors Ltd is asking vendors to speed up delivery of components for the Tata Nano, a car that it plans to start selling for Rs1 lakh later this year.

According to two vendors supplying parts for the Tata Nano, the firm has asked key vendors of its 50-strong supplier base in Singur, West Bengal, to deliver components over the next 45-75 days at the latest, even as the completion of its own plant is some 90 days beyond the original deadline of starting production in July.

The vendors didn’t want to be identified because it would jeopardize their relationship with the firm, which has tried to keep details of the Tata Nano under wraps since showing the car in January.

The Tata Nano is likely set for an October roll-out from a Rs1,700 crore manufacturing facility in Singur that will be capable of making 350,000 units a year at full tilt.

A Tata Motors spokesperson said that the project was progressing according to the company’s timeline, whereby trial production will begin in June-July, followed with the commercial production of the car in October. The firm said it did not have any information to share on its vendor plans.

“Vehicle makers have experienced that vendors find it difficult to meet timelines,” said the chief executive of a vendor, who is setting up shop there. “There is also an underlying fear that the Mamata situation will surface again,” he added, referring to Trinamool Congress chief Mamata Banerjee, who has led farmer protests against Tata Motors setting up its plant in Singur.

Apart from these political tensions, the two vendors say there is a shortage of trained contractors and builders in West Bengal, which was slowing building work, forcing many vendors to bring in additional contractors from New Delhi, Gurgaon and Pune to get their plants built. Vendors are also grappling with the lack of skilled labour and technicians in Singur itself, which also reflects a general shortage of skilled manpower in India’s automobile industry.

One of the same vendors said that until the January formal launch, many suppliers were sceptical whether the Tata Nano would attract buyers. The generally positive response has now put those fears to rest, he added. Tata Motors has not yet opened bookings for the Nano, but its website has had more than 15 million hits since January.

Tata Motors’ project in Singur has turned into a lightning rod for forcible land acquisition, which has faced mass protests from farmers who say their land is being taken away without their consent to feed the state’s industrialization efforts, of which Tata Motors has become the key symbol.

There have also been constant clashes between police and farmers opposed to the project. In a battle that was taken to court, a Calcutta high court ruling deemed the land acquisition by the state government as legal, creating a further sense of dispossession among farmers.

India, where around 1.4 million vehicles are sold every year, has a huge appetite for small cars, and the launch of the Tata Nano is only going to fuel this demand, coming in the face of scepticism that cars can’t be built and sold profitably for such a low sum.

But by showcasing to the world that it’s not impossible, Tata Motors has set new benchmarks in design and raised the bar for other auto makers trying to build cheap, fuel-efficient four-wheelers. Bajaj Auto Ltd and Renault SA and Nissan Motor Co. are planning to collaborate on a small car that is cheap to use.

Overall, 880,000 small cars are expected to be sold this fiscal compared with 780,000 units in 2006-07. The vehicles market will touch 2.2 million units by 2010, according to the Society of Indian Automobile Manufacturers.

Electric cars Tara Tiny, Titu beat Tata Nano on price

Barely has the dust settled down over the global wonder, Tata Nano, than a barely-known company in the eastern fringes of the country quietly crept up to usurp the mantle of the ''cheapest car in the world''. And they are environment-friendly to boot, not to mention cheaper to run as well.

Tara Tiny is a two-seater, while its four-seater sibling Tara Titu, both of which can now claim to be the cheapest cars in the world, retailing at Rs99,000 apiece. Moreover, both are electric cars.

Tata Motors set the ball rolling, and the little-known Tara International set the bar higher and prices lower to produce the two cars. . Analytical equipment maker Tara International, an affiliate of Bengal Enamel, is building these cars at its factory at Palta, a few kilometres from Kolkata, and expects to launch them from July this year.

In addition to the tiny tots, Tara International has also lined up a 14-seater bus, the Tara Shuttle and a truck, Tara Carrier. These are also priced very competitively at around Rs500,000 each.

The company also plans to launch bikes priced between Rs12,000 and Rs35,000. Apart from West Bengal, the company's other production centres are located at Puduchery,better known the world over as Pondicherry and Lucknow.

All these vehicles are electrical vehicles, and to develop them Tara collaborated with Chinese electric giant Aucma. This partnership translated in to lower running costs and maintenance charges vis-à-vis petrol and diesel-powered vehicles.

Tara S Ganguly, the company's chairman and chief executive officer and grandson of the founder Col. Dwijendra Bhattacharya who started Bengal Enamel in 1921, says electric cars contain only 35 moving parts on an average compared to a conventional vehicle's 2500, contributing to lower wear and tear.

According to Ganguly, ''Fewer parts mean less maintenance and simpler service. Also, electric cars do not need oil, filters and coolants''. Additionally, increased efficiency of electrical motors coupled with rising crude prices, results in a nominal running cost of Rs0.40 per kilometre. This is in contrast to the most fuel-efficient petrol car running at a cost of Rs.2.00 per kilometre.

While the Tiny and Titu can be charged from a 15-ampere socket at 220 volts, the electric bikes need to be charged through 5 amperes at the same potential. A daily 6-hour charge enables bikes to travel 80 to 100km, whereas the cars need 8 hours of charging to cover the same distance.

However, the top speed is limited to 50kmph. Though an impediment to highway cruising, the top speed is sufficient for urban commutes, or as Ganguly says, ''that is supposed to be the sane speed for confined and populated areas.''

Pictures available of this pint-sized powerhouse show a left-hand drive configuration. Ganguly explains saying these are meant for export markets in China and the US, with India-specific vehicles being reassembled at their factories. He also revealed that the company had received an order for 100 cars from a London-based firm.

Ganguly is extremely optimistic about the future of this car as he feels, ''In this age of global warming and increased pollution, our future lies in green cars. I am extremely confident that these cars will be runaway hits in the international market''. In tune with this optimism, a target output of around 1,000 cars, 5,000 two-wheelers and 500 buses and lorries has been slated for the first year.

With crude prices slated to go higher and people's knowledge of global warming increasing, Tara may well have bestsellers on their hands. Not only do the cars offer more for less, they make you feel good while driving one, of having contributed in a small way to the betterment of the planet.

The Tara Tiny/Titu in a nutshell:

Specifications	Measurements
Wheelbase	2150 mm
Ground clearance	150 mm
Net weight	850 kg
Number of seats	2/4
Motor power	3000 W
Battery capacity	200 Amp-Hr
Battery voltage	6V*10
Recharge duration	8 hours
Maximum speed	50 kmph
Running cost	Rs.0.40/km
Price	Rs.99,000