The Cheapest Car Producers Having Problems Securing A Factory Site!

The Tata Nano was to be the world's cheapest car at $2,500 per car. However, the company can't find a factory to manufacture the Nano.

Interestingly, India does things differently than America. In America, the local and state governments give several hundred million dollars and a parcel of land and the companies build factories. In India, the local landowners want to get paid for the land that is given to factories. The truth is, if the government would decide to give my land to a factory, I would very much want to be compensated at a fair market value. I don't know how we in America put up with this land thievery!

Anyway, at the first proposed factory location, the local landowners claimed that the factories either forced them off their land or paid them a fraction of the land's true value. At the second proposed factory location, the farmers have filed a case against the Indian government and Tata Motors. They demand fairer compensation for land sold to construct the Nano factory in Gujarat, India.

"There is no way this plant could operate efficiently unless the environment became congenial and supportive of the project,” a Tata spokesman said.

So in the meantime, Tata is producing in their undersized factory, without manufacturing enough cars to meet sales demand or achieving economies of scale leading to low profit.

Hopefully, soon they'll find a factory and produce those cheap cars for us. I could certainly use one!

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