Today’s (2 June) news that Tata Motors has – finally – inaugurated its new Sanand plant in Gujurat to produce the ultra-cheap Nano model has significant repercussions way beyond the immediate headlines.

The value brand – retailing in its home country of India for a nice, neat INR100,000 (US$2,100) – was initially launched in 2008 to a media storm of publicity but became bogged down in a violent local dispute in Singur in West Bengal as farmers objected to land being seized for the 95%-complete (and subsequently abandoned) factory.

But Tata has outlined a raft of benefits the Singur farmers may have missed by noting what production of the car in a more receptive state – with potential capacity of up to a pretty impressive 350,000 units per year – would entail.

Quite apart from already creating 2,400 jobs, the site in the western Indian state of Gujurat will potentially, in tandem with a what Tata terms a ‘vendor park,’ generate around 10,000 direct and indirect new posts.

That’s no small beer even in a country of India’s vast population.

And Tata has put its money where its mouth is. Details of the exact investment are unclear, but the Nano plant has been kitted out with – among other goodies – what it refers to as “sophisticated robotics, energy-efficient motors and carbon level measuring and monitoring systems.”

Built in a rapid timescale of 14 months starting in November 2008, the facility comprises Tata Motors’ own plant, spread across 725 acres, and an adjacent 375 acre vendor park, to house key component manufacturers for the Nano.

It’s not clear whether Tata is picking up the bill for that component manufacturers’ housing but the very fact it is there is a clear sign the automaker means business and it has thought hard about the complex social challenges India delivers. It’s not just about building big, shiny factories, it’s also about looking after the people who work there.

And maybe the following aren’t necessarily associated with India, but Tata has also included in its shopping list for Sanand what it says is “extensive tree plantation,” as well as water harvesting and ground water recharging, while at the same time harnessing solar energy for lighting.  
It goes further. Tata has introduced initiatives in 20 villages within 20km (12 miles) of the plant that involve health, education, employment and the environment. For example, this has provided drinking water for around 10,000 people, sanitation and primary schoolteacher training.

To celebrate all that, the top brass were rolled out today including Gujurat chief minister Narendra Modi, as well as Tata Sons and Tata Motors chairman, Ratan Tata.
Tata is banking its $2,100 car will be a runaway success and it will surely eye other emerging markets with an eye to replicating its value model.

Self-combustion problems notwithstanding – and Tata says it has addressed those issues – Nano could also be seen in western streets as a city models. And if they develop an electric version, the possibilities are endless.

As India and other emerging markets develop at an ever-faster pace they may well come up far more against traditional communities such as farmers who view industrial development with suspicion. The trick will be how to balance the two environments.