Rajkot-based auto-part suppliers for the Nano are gung-ho about relocation of the plant to Gujarat. Buoyed by Tata Motors' [Get Quote] decision to shift the Nano plant to Sanand near Ahmedabad, auto-part suppliers are also planning to set up new units in the vicinity as it will be a win-win situation for both -- the company as well as the suppliers.

"In Rajkot, many suppliers of auto parts for the Nano are considering setting up units near Tata's Nano plant at Sanand. It makes business sense to move closer as it would help cut logistic and inventory costs. Around Rs 10 crore (Rs 100 million) of investment is required to set up a new unit at Sanand," said Himanshu Nandasana, managing director, Bhavani Industries, which supplies auto parts to Tata, Maruti [Get Quote], Ashok Leyland [Get Quote], Fiat and Eicher Mitsubishi.

Rajkot is popularly known as an automobile and auto parts hub and it houses 40-50 producers, and over 250 sub-producers, who work for national and international automobile companies. At present, Rajkot produces more then 300 types of parts for the automobile industry and provides employment to 20,000 people. It also has the advantage of quality production and comparatively lower cost of production.

"After the commissioning of the Nano plant, the Rajkot automobile industry is expected to grow at 30-40 per cent," said Ramanikbhai Jasani, president of Rajkot Automobile Dealers Association. "The automobile industry in Gujarat has a turnover of about Rs 13,000-15,000 crore (Rs 130-Rs 150 billion) and Rajkot commands over 40 per cent of it," he added.

Amul Industry, one of the key suppliers for the Nano, will retain its Rajkot base initially. 'However, the company will definitely think of moving to Sanand. The company has trained manpower and will have no difficulty in starting a new unit anywhere in Gujarat,' it said.

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