By on December 17, 2010

Tata is doing everything possible to revive the shriveled sales of the Nano. Sales of the ultra-lowpriced Nano recently crashed to ultralow levels: In November, only 509 units changed hands, reluctantly. The success of the much hyped diminutive conveyance more and more looks like a flash in the pan, literally. The Nano became infamous for going up on flames. Then, Tata had to raise the ultralow price a few times. On top of that, Nano buyers were seen as bad credit risks by Indian banks and were hit with ultrahigh interest rates. Stir, simmer, and you have a recipe for disaster. Now, Tata has decided to fight back. However, the counter-offensive appears less inspired compared to the enthusiasm when the car was launched.

Tata now gives a four-year, 60,000km warranty on the Nano, up from 18 months or 24,000km, The Nikkei [sub] reports. Nothing earthshaking. Suzuki offers a three-year warranty on its Alto, Hyundai does the same for the Santro.

What else can Tata do? Financing. Forget about zero percent financing. Says the Nikkei: “Loans from State Bank of India, the nation’s largest commercial bank, run for seven years at annual interest of 8-11.5 percent. Most other banks offer 8-18 percent.” Before, Nano purchasers had to pay 15-19 percent, against about 11 percent for standard car loans. Has all the signs of too little, too late.

After long trials and tribulations, Tata openend a factory in Sanand that can produce 250,000 cars annually. According to The Nikkei, “accumulated shipments to November stand at only 71,326 cars.”

Ultra-lowcost cars are seen as a transitional phenomenon as a country moves towards mass motorization. Eventually, people want a real car with room for the family. Not too expensive. But also not too small. China had skipped the microcar stage completely, mass motorization was started with roomier 3-box cars such as the Santana or the Jetta, later joined by beefier Buicks. Small cars such as the Chery QQ are a recent phenomenon and all told do not command a dominating market share.

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11 Comments on “Is There A Doctor In The House? Tata Tries To Revive Near-Dead Nano Sales...”


  • avatar
    blowfish

    wonder if Gm had not had the help of toxic mortgage few yrs ago,  u think their sales figure would resemble 509 cars changed hands.
     
    When your car goes up in smoke only people would really like them perhaps be Cheech & Chong.
     
    Didnt look like they would have such a poor sales figure, as they had got the Jaguar LR by the horn.
    Havent had they tested out the car thoroughly? Exhaust pipes for a rear engine is going to be hot, i guess their engineers were too young to have anything to do with a Vee Dub Beetle.
     
    With 70,000 cars inventory only person i can see to make it disappear will be none other than David Copperfield.
     

  • avatar
    Ben

    I’ve just returned from India and obviously the Nano fire risk has affected buyers. I struggled to find any Nanos across the country, whilst Suzuki Swifts and Hyundai i20s were very common.

    Another less well known problem is impacting Nano sales, and its related to the Nano’s stated aim to get Indians off two wheel transportation and into a safer four wheel transportation. The problem is related to the fact that a large part of the Nano’s target market don’t have a car driver’s licence, and when you’ve got limited means getting a brand new car as your first car isn’t the most attractive option.

  • avatar
    dwford

    My experience with Indians as customers is that they are very conservatives buyers, and very careful with their money. Reliability is key with them also. A Nano with a high potential to catch fire that you have to pay a premium interest rate for doesn’t strike me as a deal most Indians would go for.

  • avatar
    panzerfaust

    I think Tata is going to have to do some serious re-designing of the Nano platform and renaming it; because the Nano has become toxic. 

  • avatar
    Gardiner Westbound

    Opportunity is knocking! GM can buy up the next couple of year’s Tata Nano production and rebadge ’em as the Chevrolet Craptastic.

    Look at the bright side. They can’t be much worse than the Daewoo Kalos GM rebadged as the Chevrolet Aveo.

  • avatar
    dculberson

    A seven year 8% to 11% loan on a semi-disposable car.  That’s actually making me sad – the thought of the Indian consumers falling for the same debt trap that has locked up so much of America’s net worth.  Hopefully they don’t fall for it.

  • avatar

    Now this is something Sajeev didn’t foresee, indeed nobody did.

  • avatar
    obbop

    Guru-like efforts needed to transcend negative karma to positive karma.

  • avatar
    LALoser

    Not long ago some writers and commentors we talking about the Nano in the US and Euro market. Now for Mahindra…

  • avatar
    Mike C.

    Perhaps they should borrow a name from Renault and re-christen it the Fuego…

  • avatar
    MarcKyle64

    You would think that the original VW Beetle would do well in India if people were looking for a reliable car that holds four.


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