Nano: Caparo Group setting up component plant

NRI industrialist Swraj Paul-owned Caparo Group, a key vendor for Tata Motors' Nano project, is setting up a Rs 120-crore (Rs 1.2 billion) facility at Singur to supply sheet metal and vehicle frames for the world's cheapest car -- due for commercial launch later this year.

With the Rs 100,000 car already unveiled and Tatas resolving other issues with the West Bengal government, the component manufacturers have to gear up to meet the Nano deadline, Caparo Group CEO Angad Paul said on Monday.

"We have to be ready before the Tatas are ready," Paul said on the sidelines of a breakfast meeting between industry leaders and British Prime Minister Gordon Brown in New Delhi.

He said the Caparo facility would supply 12 to 15 per cent of the Nano components, including sheet metals and vehicle frame.

Asked whether the project would offer enough margin to component suppliers, considering the fact that Nano was the world's cheapest car, Paul said if there was no profit, he "would not go into a project."

While there was always a battle of margins with customers, "as a CEO, I have to increase the companies' sales 10-fold and enhance margins."

He said while the Tatas had initial plan to make 250,000 cars a year, they may ramp up the capacity to go up to a million. "This car can sell in seven figures in India alone."

The Caparo Group has lined up investment of Rs 1000 crore (Rs 10 billion), mainly in automobile components. It has already commissioned 19 plants in the country while nine more are in the pipeline.

It is supplying components to Maruti Suzuki, Honda, General Motors and JCB.