World’s Cheapest Car: Nano Makes Commercial Debut

Tata Motors created history in Mumbai on March 23, 2009. Keeping his promise, made four years ago by Tata Group Chairman Ratan Tata to deliver the Rs.1 lakh car, has now been fulfilled with the commercial debut of the Nano. The occasion marked the launch of the snub-nosed car that was unveiled in January 10, 2008. Described as “People’s Car” by Ratan, Nano’s commercial launch marked a milestone in a journey, which was replete with controversies, hurdles and criticism from competitors.

Mission Accomplished

According to Ratan, the vision was to give the people of India a car which is not produced anywhere else in the world. Though Nano, which denotes high technology and small size, the Tata Group has tried to provide a reliable mode of transport to every Indian family. Tata Nano, the small-car with a huge following, entered commercial sector but the Rs 1,00,000 price tag that drove it to fame may not stay for long. The world’s cheapest car stable comes with a rear mounted all-aluminium two-cylinder 623 cc petrol engine meets all emission and safety standards.

The project was conceived in 2003 and has cost over Rs 2,000 crore. The company would use its Pantnagar facility, which has an annual capacity of 50,000 units, to roll-out the Nano until in Sanand unit in Gujarat goes on stream. The company shifted the manufacturing plant from Singur in West Bengal to Sanand in Gujarat following fierce political opposition. The new facility would have an annual capacity of 2.5 lakh units scaleable up to five lakh units.

Overwhelming Response
The initial response to the Nano has been overwhelming. Noddy-land car is expected to help the compny cross several milestones. It will make millions of Indians mobile. Ratan, who is himself a trained architect, wanted a car to tell enough to hold his 5ft tall frame. Ratan once joked in the factory that he wanted to drive the car himself at the launch. That is how the car gets its tall boy looks.

According to market research company Crisil, Nano's price reduces the cost of ownership of an entry-level car by 30 per cent and to below three times the cost of owning a motorcycle. This will make the car affordable to an additional 14 million families, including a section of 58 million two- wheeler owners.

Booking and Delivery
Now the Nano would be displayed at the company’s dealerships from the first week of April 2009. Booking for the rear-engine car that boasts of a fuel economy of over 23 km per litre will open on April 9 and close on April 25. The car would be sold to one-lakh customers to begin with and they would be chosen through a draw of lots. The delivery would start in early-July 2009.

The base model could easily have an on-road price of Rs 1.20 lakh after adding taxes such as excise duty, education cess and road tax, along with transportation cost, local taxes, insurance and registration fees and a lifetime parking fees (wherever applicable).In February 2009, Tata Motors had appointed public sector lender State Bank of India as the sole booking agent for the world’s least expensive car from the stable of Tatas. The booking amount is reportedly fixed at Rs 70,000. Customers would be able to book it with an upfront payment of Rs 2,999. Those who are not allotted vehicles would be paid interest at the rate of 8.5 per cent for the first year and 8.75 per cent for the second year if they choose to retain the booking.

New Segment
While the Nano will not affect the other compact cars in the market, it will create a new segment of buyers, mainly those who want to upgrade from two-wheelers to four-wheelers. The Nano has knocked its critics and the competition into touch, of that there is no doubt. It is not an apology of a car as many would have liked to have drummed into the unsuspecting.

The Nano is a properly thought-out design, efficiently packaged so as to use just so much material and not more, is safe (meets the frontal crash test limits and also the off-set and side-impact crash test legislation abroad), has a modern yet simple drive train which delivers performance as intended, can seat four in comfort, has all-weather protection, is contemporarily styled and is both fuel efficient and spews tail pipe emissions lower than some two-wheelers on the market. In fact, this is a car which the greens should embrace rather than oppose in their zealously misguided pontification.

Export to Europe
Ratan announced plans to launch an Electric Indica model in Norway and a US model in the next three years. The US has certain additional requirements that no other country needs and as result needs some redesign. It would develop a version of the nano with options the US market might want to have.

Exports to Europe would begin sometime in 2011 as the car has to meet certain requirements. India has been gaining significance as a small car manufacturing hub with small car exports of 0.3 million in 2008-09. Small car exports have grown at a compounded annual growth rate of 21 percent during the last five years and are expected to more than double by 2013-14.

The Nano initiative, entailing significant product design innovation and cost optimisation, further adds to the competitive edge of automotive manufacturing in India. Lower middle-income countries including India account for around 53 percent of world population, but only 13 percent of global car sales; ultra-low cost cars are expected to be a key driver for increasing the car ownership in these countries.