Can the world’s cheapest car go global?
 The Nano is a pet project of Ratan Tata – the chairman of the Tata Group. Six years back he envisaged a car cheap and economical enough to get Indians off their motorcycles and on to four wheels. Of course there have been numerous setbacks on the way. Initially to be manufactured in Singur (one of India’s most impoverished regions), Tata faced ire from local politicians and farmers. The plant was then relocated to Sanand, Gujarat almost when the Singur Plant was near completion and the revised start date was March 2009. To achieve that it was essential to temporarily build the car at one of its existing plants – at Pantnagar and produce the engines at its headquarters in Pune.
Pantnagar can only make 50,000 Nanos a year. The Sanand plant, which should be ready in about a year’s time, will have an annual capacity of 250,000 expandable to 500,000. Tata has pledged to maintain the launch prices for this first batch of cars, some of which will not be delivered until well into next year. One lakh rupees is the ex-factory price, tax and delivery included, the Nano which has three equipment levels, starts at Rs. 1.23 lakh going up to Rs. 1.72 lakh.
While looking anxiously at what the Nano might mean to the car markets in developing countries, rival manufacturers remains skeptical about the project’s viability. Shinzo Nakanishi, Chief executive, Maruti Suzuki says ‘We simply cannot build and sell a car for 100,000 rupees’. Clearly, the Nano cannot be making money in the launch phase but Tata remains unfazed that eventually it will be highly profitable.
Surprisingly, Tata also unveiled the Nano Europa, a more elaborately equipped version intended for launch in European markets in 2011 at the Geneva Motor Show earlier this year. Tata has also announced that yet another version is being developed for the United States. Because of the modifications and extra features needed to meet EU and US safety and exhaust emissions regulations, these cars could cost twice as much as the Nano sold in India but Tata claims that will still be the cheapest new car in those markets.
On an ending note, as a car for India, the Nano is excellent, even brilliant, though its prospects in the Europe and Us markets may not be so promising. Most of the things that were cast aside when designing the car will have to be replaced if the car is to meet Western safety legislation, and these export models will have a larger, 950cc, three-cylinder engine. The sticker will be more than double the Indian price for the top Nano. It could still be the cheapest new car but it will be a lot closer to more familiar conventional cars at the bottom of the European and US markets. |
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