Tata Motors is reportedly working on variants of its 1-Lakh car ‘Nano’ to counter rising fuel prices which will affect sales according to the Chairman, Mr. Ratan Tata. The singur plant which will produce Nano will come into operation by the last quarter of this year. In a letter to its shareholders, Mr. Tata has also mentioned that new manufacturing facilities expanded to meet domestic and global demand in the future.

“New variants of the Nano are also currently under development to meet the new environmental and fuel price challenges, as also the market requirement of several international markets,” Mr. Ratan Tata said.

The year ahead will be “a year of major challenges” and that “higher fuel prices will negetively impact both commercial and passenger car sales” Mr. Tata said.

“In addition, the company will have to manage the completion of the Singur plant and introduction of the new Nano in the market. While dealing with these challenges in India, the Tata Motors’ operations will also have to absorb the cost of the JLR acquisition, and deal with its integration,” Mr. Tata said. On a positive note Mr. Tata also stressed upon the point that “the year ahead will be no more daunting than the challenges they have faced in diffucult years in the past.”

The material costs like steel, tyres and the likes are also likely to go up steeply coupled with the impact of tighter money supply due to higher interest rates. Mr. Tata is hopeful that his company will meet all the challenges posed by current scenario’s prevalent in the market while also readying for the future.