Will Nano drive to Dharwad?

As the Tata's get a green signal from the Karnataka Chief Minister Y S Yediyurappa to set up the Nano plant in Dharwad, the question arises how feasible is it for the Tata's to actually make the shift?

Here is a verbatim transcript of Abhir VP comments on CNBC TV18. Also watch the accompanying video.

There is a Telcon plant in Dharwad owned by the Tatas and soon if things go the Karnataka government's way then the Nano could be its new neighbour. Chief Minister Yediyurappa has sent Tata Motors an open invitation to set up a 1000 acre plant

BS Yediyurappa, Chief Minister, Karnataka said, "I met Tata Motor's executives and their Dhadwad unit will be operational within a month. I offered them to shift to Dharwad if they want to from WestBengal and I offered them all assistance. They are very receptive. Now the decision is left to them."

With CM Yediyurappa going all out to make sure that the Tata's get their plant here in Dharwad it's a win win situation for both. The Tata's get a plant for the Nano and for Yediyurappa they get investment in Northern Karnataka.

But what makes the Dharwad plant an attractive option for Tatas? Dharwad is close to Pune, the manufacturing headquarter of Tata's. The presence of Tata's exisiting plant for its marco polo bus unit is another plus point. Vendor parks for Tata's commercial vehicles have set up base there plus vendors of Toyota in Bangalore and Tamil Nadu are close by. Also, South India constitutes almost 30% of the passenger car market.

But, there is flip side to this story. The Tata's will have to start from scratch in Dharwad as most of the technology used in the Marcopolo plant cannot be used to manufacture the Nano. Regular power supply in Northern Karnataka is a problem. Finally, the additional investments in Dharwad may push the price beyond Rs 1 lakh.

The final answer on whether or not the Nano will have a made in Karnataka tag will be known in the next two months.