Tata Motors may phase out Nano car from India: Report

To survive, the company had to manage production of 250,000 units per year but Nano was selling far less.

By: Express Web Desk | New Delhi | Published: July 14, 2017 1:40:29 pm
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Automotive giant TATA Motors may not invest any further on the Nano model resulting in its gradual phase-out from the domestic market, a newspaper report said. However, the car will continue to be produced for the export markets, the Hindu Business Line reported.

Nano, the dream project of Ratan Tata who wanted to mass-produce a car with a price of Rs 1 lakh or less, was launched in 2008. It became a global sensation as no other auto manufacturer had managed the feat of producing a car with such a low price tag and still make a profit on it. However, TATA seemed convinced that they were up for the task.

The project had a rough start as TATA’s plan to build a plant in Singur in West Bengal never saw the light of day. Widespread farmer protests over land compensation forced the company to shift base to Gujarat.

Slowing Sales

Almost a decade on, it became clear that the Nano project had failed. The model is considered the worst performer in its segment. To survive, the company had to manage production of 250,000 units per year but Nano was selling far less. An Autocar India report said TATA met only one-tenth of the production targets i.e. only 14,150 Nanos were sold between October 2015 and September 2016. In June last year, the company had reportedly sold just around 481 units of the car.

The export market of the car was not showing great progress either. Only 595 units of the car were exported in 2015-16 fiscal year.

New emission standards

With the new Bharat Stage (BS-VI) emission norms coming into effect by 2020, TATA may not feel the need to invest on the car’s upgradation especially as its sales are flagging.

With cumulative losses arising from the Nano project pegged at Rs 6,400 crore, the company may be forced to increase the Nano price tag to meet the new emission standards. Such a move would not go well with customers who are looking for India’s cheapest car.

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