People in the hilly town of Gopeshwar in Chamoli district were recently surprised to see the Nano, Tata Motors' [Get Quote] controversial Rs 100,000 car, parked on a roadside.

The Nano had travelled all the way from Pantnagar, crossing the tough, serpentine roads of Uttarakhand, to reach picturesque Gopeshwar nestling in the Garhwal Himalayan region.

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This was one of the Nano's toughest tests, being conducted by engineers of Tata Motors in the rugged Himalayan region.

Significantly, the mileage of the small car is being projected at 17-20 km per litre in the hills.

"We have conducted the test drive of Nano in the hills of Uttarakhand and Pune. Initial reports are very encouraging," an official of the Tata Motors plant at Pantnagar told Business Standard.

Now after a series of test drives, the car is set to be launched in the first quarter of the next financial year, the official said. The exact date of the launch of Nano would, however, be decided by chairman Ratan Tata, the official added.

The company has already given a commitment to Uttarakhand Chief Minister B C Khanduri that it would roll out the first Nano from the state.

For expansion, the company has been allotted 45 acres of extra land at Pantnagar by the state government. A decision in this regard was taken by a high-powered committee headed by Khanduri, which met here on December 22.

Tata Motors is currently manufacturing Ace trucks at the Pantnagar facility. The commercial launch of the car has already been postponed by at least two to three months, after it was forced to relocate from West Bengal following political protests there.

Although, the mother unit of the car will be set up in Gujarat, where the company has recently been allotted 1,100 acres, the firm is also planning to set up a permanent manufacturing facility for Nano at Pantnagar.

In addition to 45 acres, the chief minister has also assured  company officials that their other demands would also be considered.

The state government has been trying to lure Tata Motors to set up a permanent plant for the Nano at Pantnagar, stating that the company must benefits from the incentives available in the state in the wake of the Special Industrial Package, 2003, which offers a range of tax incentives.