Tata Nano

The Tata Nano is a compact city car that was manufactured and marketed by Indian automaker Tata Motors over a single generation, primarily in India, as an inexpensive rear-engined hatchback intended to appeal to current riders of motorcycles and scooters — with a launch price of ₹1,00,000 or US$2,500 on 10 January 2008.

Tata Motors projected production figures of 250,000 annually at launch. This was not achieved, and various factors led to decline in sales volume, including delays during the factory relocation from Singur to Sanand, early instances of the Nano catching fire or the perception of the car being unsafe and lacking quality due to cost cutting. Actual sales reached 7,591 for model year 2016-2017. The project lost money, as confirmed by former Tata Sons chairman Cyrus Mistry and by 2017 Tata Motors management.

In 2017, Tata Motors said manufacturing would continue due to the company's emotional commitment to the project. Production was eventually halted in May 2018. The Sanand Plant now produces other hatchbacks like Tiago and Tigor.

History

After successfully launching the low cost Tata Ace truck in 2005, Tata Motors began development of an affordable passenger car that would appeal to the many Indians who ride motorcycles. The purchase price of this no frills auto was brought down by dispensing with most nonessential features, reducing the amount of steel used in its construction, and relying on low cost Indian labour.[citation needed]. This led to reductions like the passenger's side wing mirror, one wiper blade, only three lug nuts per wheel or removal of the fuel filler cap from the tank. Tata said it was the first time a 2-cylinder petrol engine was being used in a car with single balancer shaft.

At introduction the Nano received much media attention due to its low price of 1 lakh rupees (Rs. 100,000). Some promotional material labeled the vehicle as "The People’s Car".

Expectations and effects

Expectations created for the car during the run up to its production were commented as being out of proportion with realised sales. A 2008 study by Indian rating agency CRISIL projected the Nano would expand the nation's car market by 65%,[16] but, as of late 2012, news reports have detailed the underwhelming response of the Indian consumer to the offering; sales in the first two fiscal years after the car's unveiling remained steady at about 70,000 units. Tata intended to maintain a capacity to produce the car in much larger quantities, some 250,000 per year, should the need arise.

It was anticipated that its 2009 debut would greatly affect the used car market, and prices did drop 25–30% prior to the launch. Sales of the Nano's nearest competitor, the Maruti 800, fell by 20% immediately following the unveiling of the Nano.[19] It is unknown if the Nano has had a lasting effect on the prices of and demand for close substitutes. In July 2012, Tata's Group chairman Ratan Tata, who retired in January 2014, said that the car had immense potential in the developing world while admitting that early opportunities were wasted due to initial problems. Due to the sales drops, only a single unit was produced in June 2018. The Sanand Plant now produces other hatchbacks like Tiago and Tigor.

Singur factory pullout

Main article: Tata Nano Singur controversy

Tata Motors announced in 2006 that the Nano would be manufactured in Singur, West Bengal. Local farmers soon began protesting the 'supposed' forced acquisition of their land the new factory entailed. Tata first delayed the Nano launch and later decided to build the car in a different state, Gujarat, instead.

Price

Announced as the most affordable production car in the world, Tata aimed for a price of one lakh rupees, or ₹100,000, which was approximately $2,000 US at the time. Only the very first customers were able to purchase the car at that price, and as of 2017, the price for the basic Nano starts around ₹ 215,000. Increasing material costs may be to blame for this rapid rise in price.

Compared to the Volkswagen Beetle it had a relatively low price, though still high in terms of the average salary of an Indian industrial worker or farmer. In 1990, a Beetle from Mexican factories was priced at $5,300,[27] about $10,499 in today's money. The Ford Model T's initial price was about $850, equivalent to $24,483 today.[28] The price of the Nano was only just higher than the corrected price of the Briggs & Stratton Flyer of the 1910s, with the Flyer costing US$125 ($1,767 in 2016), while the Flyer may today be classified as a go-kart more than a car.

Cost-cutting features

The Nano's design implements many measures to reduce manufacturing costs. Comparison with the Maruti Alto 800, the Tata Nano's closest competitor.