Automakers announce plans to launch Nano rivals
Mohini Bhatnagar
25 January 2008
Global car makers have been enthused by the Nano to announce the launch of their own versions of Ratan Tata's dream car, reports Mohini Bhatnagar
Nano, the Rs1-lakh wonder car from the house of Tatas may have to deal with a strong competitor on the roads two years later if Carl Ghosn, chief executive officer, of French carmaker Renault SA and its Japanese affiliate Nissan has his way.
Apart from Bajaj Auto, which has also unveiled the concept for its small car at the start of the Ninth Auto Expo in Delhi, costing $3,000, automakers like Hyundai are also planning small car offerings.
Significantly Ghosn said at the World Economic Forum in Davos, Switzerland, that Renault and Nissan would launch a new car at the same price range as the Nano in India and that the model would go on sale within ''a year and a half'' of the scheduled launch of the Nanao in late 2008.
Renault SA and Nissan were earlier planning to roll out a $3,000 car but have now scaled down the targeted price and Ghosn said that the expected cost might be around $2,550 dollars or Rs1.2 lakh.
The target date for the launch of the cheap car from Renault Nissan can thus be expected to be around early 2010.
Renault and Mahindra manufacture and market the C segment Logan in India. The car, branded as Dacia Logan in Europe, is sold on the value-for-money platform in India priced between Rs4.5 lakh and Rs6.5 lakh for the top-end version.
Car sales in the developed markets like the US, Japan and Europe, are either falling or growing at less than 5 per cent per annum according to statistics from the Organisation Internationale des Constructeurs d'Automobiles, an international grouping of auto makers. Further the US market has started showing recessionary trends.
Against this the passenger car market in India has grown at an average of 14 per cent a year over the past three years.
For Renault SA to scale down the price of the new, low-cost, made-in-India car by $450 is almost compulsory since the future potential in small cars is enormous given the size of the two-wheeler market. About 7 million motorcycles are sold in India annually against one million cars and ten per cent of the motorcycles sell for more than Rs55,000.
That the Nano is likely to sell at no more than Rs1.15 lakh – Rs1.20 lakh, at least initially, and will give Tata Motors a huge prime-mover advantage in capturing the mindspace of a large number of consumers. Thus any carmaker wanting to occupy the small car slot had better not try breaching the Nano's price barrier to begin with.
