Tata Nano Sales Drop To Nano Levels
Bloomberg reports that the world’s cheapest car, the Tata Nano has seen its sales drop from the point where it had to hold a lottery to choose buyers for its first 100k units to last month’s all-time low of only 509 units sold. Tata has raised the price twice this year, bumping the MSRP by 4 percent in July and then adding another $200 to the price in October. This, in addition to the Nano’s fire-related issues and the inability of Indian consumers to secure financing for the microcar is being blamed for the sales drop. Says Mahantesh Sabarad, an analyst with Fortune Equity Brokers (India) Ltd:
The product has had a difficult time in terms of its perception ever since those fire incidents came in. A lot of people bought the car in the initial sales period for its novelty factor and didn’t go for loans
Tata’s response: hire more sales staff and work with banks to secure loans for Nano customers. After all, the Indian automaker has 250k annual production capacity assigned to the Nano, so sales had better start picking up soon.
TTAC is fast becoming FAUX News of auto-bologosphere. Niedermeyer missed the part were only one of the two plants for manufcaturing Nano is only operational and it is currently sold in less than half states in India due to production capacity limitations. Do a better job when you do a cut and paste.
The 'lack of credit' excuse somehow doesn't make sense when the next vehicle in the chain, the Maruti-Suzuki Alto, sold 32k units in the same period. [http://www.team-bhp.com/forum/indian-car-scene/93000-november-2010-indian-car-sales-figures.html]
In the last two years there has been a lot of excuses offered to explain the poor sales of the Nano. The plants were not operational, lack of credit, lack of availability across the country, price hikes, fire-related issues, and more. I think these are all bull$%^&! (except maybe the flame-prone one!) The real root of the problem is that Indian consumers just don't want to buy the car! There is no way the reason why the Nano sold 500 units last month is because production couldn't keep up. The way the plants are geared they should be able to pump out 500 units in a single day! Also if you read Indian blogs like team-bhp mentioned above, the reason why these numbers are shocking is specifically because the car has now become available broadly across India, and the consumer response is just not there. My view is that the car: 1. doesn't appeal to the Indian middle-class. Among other things, apparently the noise it makes is 'embarrassing' (i'm quoting Indian consumers here) and therefore nearly no one wants to be seen in one. 2. doesn't appeal to its original target (people who couldn't otherwise afford a car) because it's still more expensive than some pretty valid second-hand larger cars. No Indian family with luggage can fit the Nano, and there's nothing Tata can do about that Painful but true Matt http://bestsellingcars.wordpress.com/
And I thought the big risk they were taking was buying Jaguar/Land Rover because I wasn't sure an Indian company would have the cachet luxury car buyers would want (I still remember Titan watches being marketed as some sort of Indo-Swiss hybrid luxury-wannabe). I guess the whole point of cars over there is that they have to be a lot more practical than scooters in order to be considered or people will put up with the inconvenience of two-wheeled transport?