Chinese auto giant to build cars, buses in India

KOLKATA: Chinese auto major First Automobile Works (FAW) Group, which has evinced an interest to set up a manufacturing base in West Bengal, is now scouting for land in Maharashtra and Tamil Nadu.

FAW Group plans to manufacture passenger cars priced at Rs 1.6 lakh and 80-seater buses in India, said JK Saraf, chairman of Ural India, which has entered into a pact with FAW Group for setting up an automobile plant in the country.

When contacted, Mr Saraf said: "FAW is scouting for land in Pune and Chennai." The development comes at a time when the Buddhadeb Bhattacharjee government has been desperately trying to attract the Chinese car maker in the aftermath of Tata Motors' exit from Singur.

Mr Saraf, however, said: "From the Ural India side, we are trying to bring the investment into West Bengal. FAW has seen four sites here at Kalyani, Kharagpur, Haldia and Singur. However, the Chinese auto major will take some time to take a final decision."

For the proposed manufacturing unit in the country, "an investment of Rs 1,500-2,000 crore will be required. We have signed an MoU with FAW Group for setting up a 50:50 JV in India," Mr Saraf told ET. Ural India is a joint venture between Uralaz of Russia, Kolkata-based Motijug Group and the West Bengal Industrial Development Corporation.

The company makes heavy-duty and high-capacity trucks, dump trucks and tippers at its manufacturing facility at Haldia in West Bengal. However, West Bengal government sources said the Chinese company might ask for some incentives from the state for setting up its unit.

"The global recession has hit every sector hard, and the automobile segment is no exception. It is normal for the FAW Group to seek incentives from the state. We have asked them to submit a detailed proposal," a senior state government official said.