Tata Motors will set up a permanent facility for manufacturing the Nano, the world's cheapest car, at Pantnagar in Uttarakhand, even as round-the-clock work to ready Nano's new home at Sanand, 40 km from Ahmedabad, by 2009 is on.

''On the request of the state government, Tata Motors has agreed to convert its interim `Nano' arrangement into permanent one at Pantnagar,'' reports quoting the state's principal secretary (industries) P C Sharma said.

While Ratan Tata had promised to deliver the Nano from its new stable in the shortest possible time, the demand for Nano, launched yesterday, is estimated to far exceed the projections, according to dealers. (See: Ratan Tata launches Tata Nano) 

Tata Motors is also reported to have launched a distribution company - Tata Motors Distribution Companies Ltd - at Pantnagar industrial area to sell the Nano.

The base model of the Nano - Tata Nano Std (BS2 ) - will cost Rs1,12,735 ex-showroom Pantnagar.

The state government expects to rake in revenues to the tune of Rs200 crore from the sale of the Nano car and other commercial vehicles that are being manufactured at Pantnagar.

The state government has allocated 100 acres of land at Pantnagar for setting up the Nano manufacturing facility in addition to the 20 acres of land it got for setting up the distribution company and the 45 acres it got for Pantnagar expansion.
 
Meanwhile, a parallel market is also developing for Nano accessories and authorised dealers expect the spares to command a ''substantial'' premium.

Since the Rs1-lakh car will be kitted out in ''custom-built accessories and merchandise,'' the dealers expect accessories to command a 15-20  per cent margin, almost thrice the normal margins of 5-7 per cent in the small-car segment.

With bookings outstripping expectations on the first day itself, Tata dealers expect total countrywide bookings to hit a million soon.