Nano production resumes after shutdown at Sanad

Tata Motors has resumed production at its Sanand plant in Gujarat, where its ultra low-cost car Nano is being manufactured. The plant was shut for a fortnight ''for maintenance and to rationalise inventory'', the company said on Sunday.

The plant has a capacity to produce more than 20,000 units a month. But inventory has been piling up due to slow demand for the car.

Sales of the small car fell 64 per cent year-on-year in July. Country-wide dispatches to dealers stood at 3,260 units, compared to 9,000 units sold in the same month last year.

However, Tata Motors said Nano sales have risen by 6 per cent to 25,239 units so far in the current fiscal year. It added that it was witnessing very encouraging response to its consumer-oriented marketing efforts, resulting in increased inquiries and footfalls at its showrooms.

Tata Motors dealers have been reporting high inventory levels of the Nano in the last few months, which lead to the correction. The company has stepped up efforts to promote the mini car, despite a bleak outlook predicted by analysts.

Tata Motors shares rose immediately after the news, with the scrip having gained around 2.75 per cent on the Bombay Stock Exchange at the time of writing.