New Nano plant in Indonesia

Indonesia appears to have gained an edge over Thailand as the production site for the Tata Nano, the world's cheapest car, said the reports, adding that Thailand was in contention to make the Nano since the Indian auto-maker has been producing its Xenon and Ace light trucks at its factory in Samut Prakanin since 2009.

However, since Indonesia offered more attractive incentives, Tata decided to shelve the expansion plan in Thailand, the paper said, quoting unnamed sources. The Indian company is now said to be in talks with PT Astra International, Indonesia's leading automobile company, to produce the car.

Tata was one of seven manufacturers looking to develop eco-car projects in Thailand, but it scrapped the plan because of concerns about an unfavourable tax structure and the requirement to produce at least 100,000 cars a year by the fifth year of operation. A Tata spokesman said at the time that the company wanted to build a highly fuel-efficient and environment-friendly car in Thailand that would be suited to Thai consumers' needs.

However, it probably would not be the Nano. The source confirmed, however, that Tata would launch a Nano imported from India by the end of this year at the Thailand International Motor Expo to build consumer awareness about Tata's passenger car brand before the cars are actually built in Indonesia.

The deliveries would start early next year. The Nano to be marketed in Thailand will come with a 600-cc engine, but with enhanced performance and speed to meet Thais' preferences. The top speed will be raised to 120 km/h from 105 km/h, the top speed for the Indian model.