Indonesia appears to have gained an edge over Thailand as the production site for the Tata Nano, the world's cheapest car, the Bangkok Post said today, 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.
Quoting the source, the paper added that Tata was concerned about political stability in the country and also found the local automobile tax structure discouraging.
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
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