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Tata nano losing favor, November sales drop

By SiliconIndia | Thursday, 02 December 2010, 17:36 Hrs | 3 Comments

Mumbai: When Tata Motors announced Nano, it was the world's cheapest car, and found instant favor with Indian families who could not afford an automobile earlier. But the sales report of November shows that it is losing its glaze, with the low-cost , four-passenger car reported sales of just 509 units in November, a dramatic decline from 9,000 units in July, even as automobile sales surged on easy finance and festival season, reports Economic Times.

This is a stark contrast in a country which is flaunted as the world's fastest growing automobile market when compared to Mercedes, one of the costliest cars in the world, which sells more than 500 units in India. However, despite the fall in Nano sales, Tata Motors' second-quarter profit rose more than 100-fold as a global economic recovery spurred demand for luxury sedans and sports utility vehicles. The company's stock price has appreciated 78 percent over the past six months. But the Nano will continue to remain a headache for Tata Motors. The company had targeted a production of 20,000 units a month by December 2010 at the time of its launch last year.

The initial enthusiasm of customers who had rushed to book the Nano when Tata Motors launched it with a target sale price of 1 lakh, less than half the cost of the cheapest car available in India, was quenched with a series of reports on the car catching fire, starting from March this year. Ravindra Bhagat, an Ahmedabad based businessman, was one such customer who bought a Nano last year. Bhagat's dream turned sour when the car caught fire within 20 days of its delivery. Sales curved in after the initial euphoria because the car was not reaching the target audience, said people familiar with the company's administration.

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Reader's comments(3)

1: Tata Motors should ask Nano Car Users what defects they find in their cars and what improvements could improve the look and performance of the car. After receiving the User Comments, they should ask their R & D to suggest improvements in the car to make it popular. The improvements should not increase the price beyond 1.5 lakhs.

Posted by:Ratilal V. Shah - 03 Dec, 2010

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2: My forecasting is coming true...status quo is also an important factor in luxury items.

Posted by:Manoj - 03 Dec, 2010

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3: This was a major setback for Tata Motors as indian customers are not prefer cheap car over tecnologically advance car. This is a lesson to all companies who are thinking of creating cheapest car for Indian customers. More over, the design part is also not attractive in compare with the next chep car in indian market. Tata should come up with a new model which should price between two & three lakhs not a four wheeler autorikshaw.

Posted by:THOMAS - 03 Dec, 2010

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