Violence Surrounds Production of $2,500 Mini-Car

Ratan Tata, chairman of India's Tata conglomerate, threatened to close his factory for assembling the world's cheapest car in reaction to violent protests and political opposition to the manufacturing facilities in the state of West Bengal.

He told reporters in Kolkata on Friday that Tata Motors Ltd., India's biggest auto maker by sales, will relocate a project to produce the $2,500 Nano mini-car if disruptions continue at its factory site in the east of India.

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Mr. Tata's comments encapsulate many of the frustrations of even India's most powerful businesses as they seek to expand and build new facilities, often in impoverished areas. While encouraged by state governments to build in such areas, they frequently face opposition from local politicians and farmers.

Tata is on track to start rolling out the 623-cubic-centimeter rear-engine Nano as early as October in what would be a coup for Indian auto manufacturing. But Mr. Tata, a prominent Indian industrialist, said his company is getting tired of dealing with regular protests, break-ins and even attacks on its employees.

Local politicians have been demanding that the facilities be returned to farmers who were forced to leave their land to make way for the plant. Tata denies that it grabbed the land from farmers. Still, after months of negotiations, Mr. Tata said that if it becomes apparent that Tata Motors is still not wanted, it is willing to leave.

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"If anybody is under the impression that because we have made this large investment of about 15 billion rupees [about $345 million], we would not move, they are wrong," he said. "There is a definite concern of being where we are not wanted and there is a definite concern about being where people are suspicious of our motives."

A decision to move production facilities could boost costs and delay the launch of the Nano for months. Mr. Tata said he has yet to arrange for any other place for the car to be produced. "There is no 'Plan B' at this time," he said.

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