Swaraj Baggonkar Moneycontrol News
As uncertainty grows over the future of India’s cheapest car Nano the demand for the mini car hit a new low clocking just 174 units in March, the lowest since its debut.
Nano has been a troubled product for the country’s fifth largest car maker Tata Motors since the past several years. The company made numerous attempts to revive demand but the loss-making project, which stands to get terminated, failed to muster positive growth.
Last financial year was the worst for the mini car as it sold just 7,591 units, which was less than the monthly volume clocked by Tiago and Tigor, the two new launches by Tata Motors which make up 50 percent of its sales.
Only twice did the Nano post monthly sales of more than 1,000 units in 2016-17 while its average monthly volumes during the same year stood at just 632 units.
Consistently falling numbers, scrappage of Nano-specific projects and lack of any official future commitments from Tata Motors suggests that the model could be on its way out.
It is to be noted that it’s is not the first time that Tata Motors has seen such low numbers of a particular model. Models like the Venture, Sumo, Safari, Aria and Winger have consistently seen monthly sales average of 300 and less but the company still continues to produce some of them.
But with the company now looking to focus on next generation products that will fill some white spaces as well as create new segments, present generation models will be phased out or get replaced progressively.
The slump in demand for the Nano comes at a time when its manufacturing plant in Gujarat has made way for the Tiago and Tigor, both of which are selling nearly 9,000 units a month or more than Nano’s yearly volumes.
Though commercially launched in 2009 the Nano will complete ten years next year since its first unveiling in 2008 at the Delhi Auto Expo. The Nano became instantly popular for its eye-catching price tag of Rs 100,000 designed to lure the middle-class buyer.
However, subsequent iterations that included subtle styling changes, creation of a boot, addition of an automatic transmission, power steering, addition of a CNG-fueled engine and repositioning of the brand led to more than doubling of its cost price.
The base price of the Genx Nano in Mumbai (ex-showroom) is Rs 2.48 lakh while the top-end automatic version costs Rs 3.5 lakh. The car competes directly with the more powerful Maruti Suzuki Alto, which remains as India’s largest selling model at around 18,000 units a month.
Tata Motors altered Nano’s positioning after it was learnt that consumers appeared dissatisfied settling for a product which was labeled ‘cheap’. In India a car is known for its aspirational value and a status symbol rather than as a means of transport.
Tata Motors tried to change Nano’s perception undertaking a multi-crore campaign that aimed to reposition the Nano as a smart city car.
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