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Is the Tata Nano in the last leg of its journey?

Sales at all-time low since launch, to 174 units in March 2017; FY17 sales down 63% to 7,591 units

Sohini Das  |  Ahmedabad 

Tata Nano car
Tata Nano. Consumer interest in the car dwindled following a few stray incidents of fire which created the perception that being an affordable car, it wasn't safe

The most famous car from the stable, the mini car Nano, is perhaps in the last lap of its journey. The highest monthly sales it clocked in the last fiscal was 1,100 units in April last year.

The sales fell to an all-time low since its launch in March 2009 to just 174 units in March 2017. Cumulatively, between April 2016 to March 2017 the company sold only 7,591 Nanos, down 63 per cent.



Compare this with the beginning of the car that was touted as the 'One lakh car' and was launched amid much fanfare in March 2009 through a lottery system. The initial euphoria around the car got it over 200,000 bookings by May 2009, a landmark of sorts in Indian automotive history. The car managed to gain considerable attention of the international press, and had gained a cult status in the global automobile industry for frugal engineering.

In fact, the car was put on display at the prestigious Smithsonian’s Cooper-Hewitt, National Design Museum in New York in 2010.

Consumer interest in the car, however, soon dwindled following a few stray incidents of fire which created a popular perception that being an affordable car, it was not safe. By October 2009, had already ordered pre-emptive checks on the car and retrofitments keeping in mind the incidents of fire.

The damage, however, was done. By the time, the Sanand factory started running in June 2010, the had already missed the bus. The initial idea was to build an affordable car that would convert the two-wheeler buyer to own a mini car for his family. Initial projections had shown that such a car could have the potential to sell around 20,000 units per month (a number close to  that of the country's highest selling small car would clock).

How the volumes fell
Month 2016-17 2015-16
April 1,100 1,486
May 856 1,365
June 481 1,700
July 701 2,120
August 711 2,235
September 610 2,415
October 726 2,300
November 525 2,263
December 1,004 1,374
January 391 1,608
February 312 1,414
March 174 732
Total 7,591 21,012
Source: SIAM
took the bold decision to build a dedicated plant for the instead of making it one of its already existing plants like Pune or Pantnagar anticipating huge demand for its affordable vehicle.

The decision, however, backfired. First, the farmers'agitation is Singur (in West Bengal) forced the company to relocate the plant Gujarat's Sanand. The loss is estimated to be around a few thousand crore. Tata Sons former chairman had pegged the cumulative losses arising from the project at Rs 6,400 crore.

While the had always struggled to pick up momentum, with the launch of automatic manual transmission (AMT) and other peppy city variants, sales had seen some signs of revival in 2015. The GenX that sports a power steering, stylish interiors and comes with an AMT variant, was launched in May 2015. Tata Motors ended FY16 selling 21,012 Nanos, up from 16,901 in FY15.

Sales, however, started falling after that and so far has not shown any signs of revival.

The buzz around killing the is indeed getting louder. The company,however, remains non-committal.

A company spokesperson had told Business Standard earlier on the issue of discontinuation, "The hatchback segment is very important for us and the regulations and customer preferences are going to play a major role in defining various sub-segments within this segment. We already have a well-defined approved PV strategy in place that will look at not only the best way of addressing the segments’ requirements but an overall perspective of the portfolio and you will see the action happening from our side.”

The irony is the Sanand plant, initially dedicated to making the Nano, is now busy making the hatchback and the sedan. Banking on these two well received products, the plant now aims to touch full production capacity within this fiscal.

A couple of years back, capacity utilisation of Sanand had dropped to 20 per cent or so.

The timeline
January 2008: Ratan Tata unveils the Nano
October 2008: plant pulled out of Singur following violence from locals
October 2008: Project relocated to Sanand, Gujarat
November 2008: starts working on rolling out from Pantnagar plant
March 2009: launched from Pantnagar
May 2009: receives 203,000 bookings through lottery system
July 2009: First delivered
October 2009: orders pre-emptive checks & retrofitment after fire incidents
June 2010: Sanand plant rolls out first Nano
November 2010: Two-wheeler exchange scheme launched for Tata Nano
December 2010: Sales continue to fall, hit a new low of 554 units
March 2011: starts exporting to Sri Lanka, Nepal
October 2013: CNG launched
January 2014: Twist launched
May 2015: GenX launched
March 2017: Sales hit an all time low of 174 units

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Is the Tata Nano in the last leg of its journey?

Sales at all-time low since launch, to 174 units in March 2017; FY17 sales down 63% to 7,591 units

Sales at all-time low since launch, to 174 units in March 2017; FY17 sales down 63% to 7,591 units The most famous car from the stable, the mini car Nano, is perhaps in the last lap of its journey. The highest monthly sales it clocked in the last fiscal was 1,100 units in April last year.

The sales fell to an all-time low since its launch in March 2009 to just 174 units in March 2017. Cumulatively, between April 2016 to March 2017 the company sold only 7,591 Nanos, down 63 per cent.

Compare this with the beginning of the car that was touted as the 'One lakh car' and was launched amid much fanfare in March 2009 through a lottery system. The initial euphoria around the car got it over 200,000 bookings by May 2009, a landmark of sorts in Indian automotive history. The car managed to gain considerable attention of the international press, and had gained a cult status in the global automobile industry for frugal engineering.

In fact, the car was put on display at the prestigious Smithsonian’s Cooper-Hewitt, National Design Museum in New York in 2010.

Consumer interest in the car, however, soon dwindled following a few stray incidents of fire which created a popular perception that being an affordable car, it was not safe. By October 2009, had already ordered pre-emptive checks on the car and retrofitments keeping in mind the incidents of fire.

The damage, however, was done. By the time, the Sanand factory started running in June 2010, the had already missed the bus. The initial idea was to build an affordable car that would convert the two-wheeler buyer to own a mini car for his family. Initial projections had shown that such a car could have the potential to sell around 20,000 units per month (a number close to  that of the country's highest selling small car would clock).

How the volumes fell
Month 2016-17 2015-16
April 1,100 1,486
May 856 1,365
June 481 1,700
July 701 2,120
August 711 2,235
September 610 2,415
October 726 2,300
November 525 2,263
December 1,004 1,374
January 391 1,608
February 312 1,414
March 174 732
Total 7,591 21,012
Source: SIAM
took the bold decision to build a dedicated plant for the instead of making it one of its already existing plants like Pune or Pantnagar anticipating huge demand for its affordable vehicle.

The decision, however, backfired. First, the farmers'agitation is Singur (in West Bengal) forced the company to relocate the plant Gujarat's Sanand. The loss is estimated to be around a few thousand crore. Tata Sons former chairman had pegged the cumulative losses arising from the project at Rs 6,400 crore.

While the had always struggled to pick up momentum, with the launch of automatic manual transmission (AMT) and other peppy city variants, sales had seen some signs of revival in 2015. The GenX that sports a power steering, stylish interiors and comes with an AMT variant, was launched in May 2015. Tata Motors ended FY16 selling 21,012 Nanos, up from 16,901 in FY15.

Sales, however, started falling after that and so far has not shown any signs of revival.

The buzz around killing the is indeed getting louder. The company,however, remains non-committal.

A company spokesperson had told Business Standard earlier on the issue of discontinuation, "The hatchback segment is very important for us and the regulations and customer preferences are going to play a major role in defining various sub-segments within this segment. We already have a well-defined approved PV strategy in place that will look at not only the best way of addressing the segments’ requirements but an overall perspective of the portfolio and you will see the action happening from our side.”

The irony is the Sanand plant, initially dedicated to making the Nano, is now busy making the hatchback and the sedan. Banking on these two well received products, the plant now aims to touch full production capacity within this fiscal.

A couple of years back, capacity utilisation of Sanand had dropped to 20 per cent or so.

The timeline
January 2008: Ratan Tata unveils the Nano
October 2008: plant pulled out of Singur following violence from locals
October 2008: Project relocated to Sanand, Gujarat
November 2008: starts working on rolling out from Pantnagar plant
March 2009: launched from Pantnagar
May 2009: receives 203,000 bookings through lottery system
July 2009: First delivered
October 2009: orders pre-emptive checks & retrofitment after fire incidents
June 2010: Sanand plant rolls out first Nano
November 2010: Two-wheeler exchange scheme launched for Tata Nano
December 2010: Sales continue to fall, hit a new low of 554 units
March 2011: starts exporting to Sri Lanka, Nepal
October 2013: CNG launched
January 2014: Twist launched
May 2015: GenX launched
March 2017: Sales hit an all time low of 174 units

image
Business Standard
177 22

Is the Tata Nano in the last leg of its journey?

Sales at all-time low since launch, to 174 units in March 2017; FY17 sales down 63% to 7,591 units

The most famous car from the stable, the mini car Nano, is perhaps in the last lap of its journey. The highest monthly sales it clocked in the last fiscal was 1,100 units in April last year.

The sales fell to an all-time low since its launch in March 2009 to just 174 units in March 2017. Cumulatively, between April 2016 to March 2017 the company sold only 7,591 Nanos, down 63 per cent.

Compare this with the beginning of the car that was touted as the 'One lakh car' and was launched amid much fanfare in March 2009 through a lottery system. The initial euphoria around the car got it over 200,000 bookings by May 2009, a landmark of sorts in Indian automotive history. The car managed to gain considerable attention of the international press, and had gained a cult status in the global automobile industry for frugal engineering.

In fact, the car was put on display at the prestigious Smithsonian’s Cooper-Hewitt, National Design Museum in New York in 2010.

Consumer interest in the car, however, soon dwindled following a few stray incidents of fire which created a popular perception that being an affordable car, it was not safe. By October 2009, had already ordered pre-emptive checks on the car and retrofitments keeping in mind the incidents of fire.

The damage, however, was done. By the time, the Sanand factory started running in June 2010, the had already missed the bus. The initial idea was to build an affordable car that would convert the two-wheeler buyer to own a mini car for his family. Initial projections had shown that such a car could have the potential to sell around 20,000 units per month (a number close to  that of the country's highest selling small car would clock).

How the volumes fell
Month 2016-17 2015-16
April 1,100 1,486
May 856 1,365
June 481 1,700
July 701 2,120
August 711 2,235
September 610 2,415
October 726 2,300
November 525 2,263
December 1,004 1,374
January 391 1,608
February 312 1,414
March 174 732
Total 7,591 21,012
Source: SIAM
took the bold decision to build a dedicated plant for the instead of making it one of its already existing plants like Pune or Pantnagar anticipating huge demand for its affordable vehicle.

The decision, however, backfired. First, the farmers'agitation is Singur (in West Bengal) forced the company to relocate the plant Gujarat's Sanand. The loss is estimated to be around a few thousand crore. Tata Sons former chairman had pegged the cumulative losses arising from the project at Rs 6,400 crore.

While the had always struggled to pick up momentum, with the launch of automatic manual transmission (AMT) and other peppy city variants, sales had seen some signs of revival in 2015. The GenX that sports a power steering, stylish interiors and comes with an AMT variant, was launched in May 2015. Tata Motors ended FY16 selling 21,012 Nanos, up from 16,901 in FY15.

Sales, however, started falling after that and so far has not shown any signs of revival.

The buzz around killing the is indeed getting louder. The company,however, remains non-committal.

A company spokesperson had told Business Standard earlier on the issue of discontinuation, "The hatchback segment is very important for us and the regulations and customer preferences are going to play a major role in defining various sub-segments within this segment. We already have a well-defined approved PV strategy in place that will look at not only the best way of addressing the segments’ requirements but an overall perspective of the portfolio and you will see the action happening from our side.”

The irony is the Sanand plant, initially dedicated to making the Nano, is now busy making the hatchback and the sedan. Banking on these two well received products, the plant now aims to touch full production capacity within this fiscal.

A couple of years back, capacity utilisation of Sanand had dropped to 20 per cent or so.

The timeline
January 2008: Ratan Tata unveils the Nano
October 2008: plant pulled out of Singur following violence from locals
October 2008: Project relocated to Sanand, Gujarat
November 2008: starts working on rolling out from Pantnagar plant
March 2009: launched from Pantnagar
May 2009: receives 203,000 bookings through lottery system
July 2009: First delivered
October 2009: orders pre-emptive checks & retrofitment after fire incidents
June 2010: Sanand plant rolls out first Nano
November 2010: Two-wheeler exchange scheme launched for Tata Nano
December 2010: Sales continue to fall, hit a new low of 554 units
March 2011: starts exporting to Sri Lanka, Nepal
October 2013: CNG launched
January 2014: Twist launched
May 2015: GenX launched
March 2017: Sales hit an all time low of 174 units

image
Business Standard
177 22