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Nobody wants 'El Cheapo Nano'

2012-01-24 09:04

NEW DELHI, India - When India's Tata Motors launched the Nano in 2009 the concept of "the world's cheapest car" in one of the world's fastest-growing auto markets seemed destined for commercial success.

Logically, the strategy appeared faultless - offering an affordable solution to millions of aspirational lower middle-class Indian families wanting to make the social and practical leap from two wheels to four. There was a huge surge of interest in South Africa, too.

However, after several years of disappointing sales, it has now become clear that the snub-nosed hatch's unique selling point - it's price - was really a commercial sticking point. Rather than embracing the Nano, the status-conscious consumer base that was its prime target has largely shunned the "cheap" tag of the $2800 (roughly R22 200) vehicle and opted for slightly pricier rivals, or second-hand vehicles costing the same.

'POOR MAN'S CAR''

Punnoose Tharyan, editor of India's Motown magazine, said: "A Nano is always bandied about as a poor man's car. Nobody wants to be caught with it."

Sales are far off the target of 25 000 a month and the Nano plant, with an annual capacity 250 000 units, produces only 10 000 a month, according to R Ramakrishnan, business head of Tata Motors' cars.

Indian automobile expert Murad Ali Baig said: "The car didn't project the right image. Also, for the same cost as the Nano, there are quite respectable second-hand cars - with air-conditioning."

The base model, sold without aircon so at a serious disadvantage in India's steamy heat, costs 140 880 rupees (R22 200). The premium version - aircon, central locking, power front windows - is 196 959 rupees.

The Nano ran into trouble from the start when a land acquisition row forced Tata to abandon a nearly completed plant and build another, badly delaying production. There were also safety concerns after a number of cars caught fire. Now Tata Motors, which also owns the British luxury Jaguar and Land Rover brands, has gone into damage control mode. Tata boss Ratan Tata conceded this month that mistakes had been made which had fuelled the perception of the Nano as "a poor man's vehicle".

CORRECTIVE MEASURES

"Whatever stigma has been attached to it, we will undo," Ratan Tata said, insisting that the Nano had always been intended as an affordable, all-weather, family car. To get sales on track, Tata has given the car a makeover, making it available in more colours, including gold and orange, and sprucing up the interior - but not raising the price.

It has also offered a "Tata Nano Happiness Guarantee" which more than doubles the car's warranty to four years from 18 months and throws in a maintenance contract for 99 rupees a month.

It is offering "fast-track" financing for buyers who need a loan to buy the car - with approval in 48 hours. Also, buyers can put down only R2380 and drive a Nano out of the showroom.

Tata Motors India managing director Prakash Telang said: "Let’s say at first it moved a little slowly in the market but now we have understood customers' requirements."

He's also convinced that the potential Nano market remains as vast as its makers originally predicted.

"Car penetration in India is about 10 per 1000 people. The West is about 400 per 1000," Telang said. "The market will continue to grow rapidly."

Typical of the buyers Telang has in mind is Dira Singh, who has a wife and two children and recently upgraded from a motorcycle to a shiny blue Nano.

"The Nano was in my budget. It wasn't costly and that's why I took it," Singh said, standing proudly beside the vehicle. "It will protect my family."

AFP

Comments
  • rheinhardt.peens - 2012-01-24 10:45

    I will use it as a golf cart!!!!

  • eric.vanvuuren - 2012-01-24 11:18

    The problem is quality related. All their cars are over priced for the quality that you get. If you make a disposable car, like any of their other models, you have to offer disposable prices.

      eric.vanvuuren - 2012-01-24 11:23

      Anyhow, open the markets so I can also get a cheap Jap grey import car. Let’s kill this unrealistic car monopoly that strangles or finances on something that should not be costing 5+ years to pay off.

  • Gary - 2012-01-24 12:30

    Just look at that geely car that sells for 80K which is bare bones, you think that local government would allow this nano to be sold in SA for 25 odd thousand rand??

  • Chris - 2012-01-24 12:49

    perfect for politicians who squander public funds...let them drive it as punishment.

  • James - 2012-01-24 16:44

    You Guys are getting screwed.Yamaha USA $12,000. same bike in SA $20,000. And people in the US make a lot more money.

      brendonml - 2012-01-24 20:05

      Yeah we earn rands for starters. How is every industry in SA monopolised and fixed??? Surely we can do something.

  • Graeme - 2012-01-25 06:46

    Cheap Nano only rated for 55kph due to cheap wheel bearings and other bits, it would be completely useless in RSA hence not one imported, we would drive it at 100 and it would disintegrate driving it home from dealer

      Gary - 2012-01-25 07:21

      Really? I suggest you do your homework before making incorrect statements, the top speed is 65mph which translates into 104kph. They're not sold in SA (yet) because they pretty much undercut anything that's sold locally.

  • Kwashic - 2012-01-25 12:24

    Maybe it would work in SA at R25 000. But in the rest of Southern Africa it wouldnt coz for that price i get an air-conditioned Jap or singapore import Corolla. Could even get a Ford Focus with a little more from the UK. SA buyers are really getting taken for a ride! smells like oligopolistic markets with price fixing.

  • ardenharvey - 2012-02-24 09:36

    The SA goverment will support any initiative to put additional vehicles on our roads. The NANO drivers will be the only people able to afford the proposed tolls! Problem solved! :)

  • Itse Nnete - 2013-03-07 11:04

    I think Tata Nano would make an awesome student car,we are in dire need of affordable wheels

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