Tata Nano nears end of road

Tata Motors' Nano, launched amid global fanfare as the world's cheapest car in 2009, is now on its last legs as dealers have stopped placing orders for the car in the last three or four months.

According to a report in the Business Standard, the daily production of the car has come down to just two at Tata's Sanand plant and the monthly sales volume was down to double digits in October.

The report says that Tata Motors dispatched 180 Nanos to its 630 sales outlets this August (against 711 in August 2016), 124 units in September and just 57 units in October – showing declining numbers even during the peak Diwali buying season.

Exports of the car have not been encouraging either - only 111 units exported from April to October.

The car was a pet project of Ratan Tata, then chairman of the Tata group, with its cheapest version priced at little over Rs1 lakh. At present, Nano is sold in a price band of Rs2.25 lakh to Rs3.20 lakh (ex-showroom, Delhi).

The Nano with its little 600cc engine never captured the Indian imagination, and was further dogged by factors (several of the cars actually caught fire while being driven out of showrooms) and more powerful products offered by rivals at a slightly higher price.

According to the BS report, it is likely that the Nano will be discontinued completely after introduction of its electric version next week.

Tata Motors will launch the electric avatar of the car on 28 November with the name Jayem Neo. The electric version Nano will be jointly manufactured by Tata Motors and Coimbatore-based Jayem Automotives.

The failure of the Nano was one of the major issues that cropped during accusations and counter-accusations following the unceremonious ouster of Cyrus Mistry as Tata Group chairman in October 2016 (See: Cyrus Mistry stands down as Tata Group chairman, Ratan Tata takes over).

Mistry had cited mounting losses from it - cumulatively valued at Rs6,400 crore - to be the key reason for the poor financial performance of Tata Motors' domestic operations.

Dealers of Tata Motors in most parts of the country have stopped placing orders for the Nano.

Business Standard spoke to five dealers of the company and they said they were sitting on a handful of Nanos but no fresh demand had been placed with the company. ''A dealer in Himachal Pradesh had some buyers and I made an internal dealer transfer of a few cars to him, made possible by the GST. I sold a few units at discounts ranging between Rs10,000 and Rs50,000. I am left with four or five units,'' said a dealer from Punjab.

Another dealer in Uttar Pradesh said the company was no longer promoting the car and there was no activity for many months. ''We are liquidating old stocks. There is hardly any customer query,'' he said.

"The Nano demand is mainly from the taxi segment. We have not stopped production of the car altogether. However, since the focus is on making the higher volume models like Tiago (more than 6,200 units a month) and Tigor (around 2,300 units a month), we do not make Nanos every day. The plant makes Nanos as per production targets given to us," a Tata Motors source told BS.

A Tata Motors spokesperson said, ''We already have a well-defined passenger vehicle strategy in place that will look at not only the best way of addressing the segments' requirements but an overall perspective of the portfolio. We continue to produce Nano catering to customer demand in key markets.''