By on December 2, 2010

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.

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19 Comments on “Tata Nano Sales Drop To Nano Levels...”

  • avatar

    Sounds like a job for Grameen Bank. And I’m only half joking.

  • avatar

    No, no, no, no.  The Nano will be sold here in the millions and put GM, Ford and Chrysler out of business.

  • avatar

    You mean Nano sales flamed out?

  • avatar

    Indian consumers have a hard time getting loans for a car that has a reputation of being unsafe-they should consider themselves fortunate.  The bubble has certainly burst in this particular market, the Nano’s competetors had better take advantage while they can.  That would be the only thing that Tata can hope for, the big out country manufacturer’s can’t respond quickly enough.  And by the way, since this big drop in sales, did the consumer go elsewhere, or did they decide on another scooter?

  • avatar

    Apu, we are keeping the oxcart. At least it will not catch fire!

  • avatar
    Robert Schwartz

    A little background music from the Blue Oyster Cult.

  • avatar

    How much do those things cost, anyway? Question for the B+B – what cars would you only have to sell one of to match the Nano’s entire monthly gross?

  • avatar

    ve need Cheech & Chong to do sequel to up in shmoke maan.
    these cars were designed in recent times, only few yrs ago, they ought to know what is flammable and what is not, unlike the trabant aka trabby who was made of recycle composite material and only God knows whats inside, if a trabby did end up in smoke then we cant blame anybody. but being a new design and material one wonder why?
    I hate to see as they put so much effort in it as modern times of Model T, it should have been sold like hot cakes , at this price is not going to last, or flying off the shelf.
    I guess coming to this side of the New World is not even going to be in my wildest dream nor in the Tarot cards anytime soon.

  • avatar

    For sales to drop 95% from July (9000)  to November (509) is astonishing.
    Even the infamous flaming Pinto didn’t experience anything like that, so there must be something else going on; perhaps the Indian market is less forgiving of such problems.
    Maybe Tata can make up for lost Nano sales by pushing Jaguars.

  • avatar

    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.

    • 0 avatar

      Even if the issues are production capacity-related, it’s hardly better – what, so instead of, “Only 500 people would buy the car when we thought 20,000 would”, it’s, “We could only make 500 of them instead of 20,000”?
      No matter which way you slice it, selling 500 cars a month when you want to be selling 250k a year is really, really bad. Somewhere, somehow, somebody f*cked a duck.

    • 0 avatar

      My my, you must be one of those folks who think they are very smart because they can make such an original and clever pun on the name of Fox News. What a bright boy! I’m sure that your mommy will give you a gold star and put your comment on the fridge.

      So, Drifter, have you ever written for publication? I mean more than a paragraph in a comment thread under some anonymous screen name. Something like a coherent 1000-2000 word commentary or news story under your real name. When you have, perhaps you’ll have the standing to critique.

      You genuinely believe that a 95% drop in sales over four months is because there isn’t enough production capacity? How does that make any sense at all? They’re not even selling anywhere near the capacity of the one plant that’s in production.
      And the bit about only being on sale in about half the Indian states. To begin with, I’m no expert on India (though I published a site devoted to the Indian auto industry for a couple of years) but the statement is meaningless without seeing what the populations are of the states where it’s on sale vs. the ones where the Nano is not yet available.

      In any case, as Tata expands Nano sales to more states, shouldn’t the trend line be going up, not down?
      Perhaps the growing Indian middle class is more aspirational than Tata figured. Maybe they underestimated the average Indian’s desire to drive something other than the cheapest new car on the planet. Or perhaps the consumers are waiting for the other one to two lakh [100,000-200,000 rupees) cars that are being developed for that market. Bajaj will bring a Nano priced car to market soon with or without the partnership with Renault. Yet others will follow.

      Who knows? Maybe the Tata is another example of a car that gets the auto industry excited about it and catches the attention of car guys, but fails to resonate with consumers.

    • 0 avatar

      See, that’s pretty much what I think. But whereas Mr. Schreiber wrote a lengthy, precisely worded and comprehensive reply, I slapped out a couple of paragraphs and alluded to sex with mallards. And that’s what makes TTAC commenters different from TTAC -journalists-.

      Well, that and the rock-n-roll lifestyle.

  • avatar

    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. []

  • avatar

    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

  • avatar

    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?

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