Get ready to fork out more for the new Nano

Tata Motors prepares to reposition the brand and roll out new variants of the same including a more powerful engine

With Tata Motors preparing to reposition the Nano brand and roll out new variants, including one with a more powerful engine, the Nano is set to see a rise in prices.

Besides the long-delayed diesel variant, the company is also working on a bigger petrol engine, compared to the current two-cylinder 624-cc engine. Such engineering changes are part of the company’s plan to reposition the Nano as a ‘smart city car’ and shed the ‘cheap car’ tag. Sources said with added features and better performance, Tata Motors would increase the price of the Nano, though it would still have a very “competitive price tag”.

Recently, another version of the Nano, one with a compressed-natural-gas engine, was launched.

At Rs 1,65,000 (ex-showroom, Mumbai), the base variant of the latest-generation Nano is 64 per cent cheaper than the next available option, the Maruti Suzuki Alto 800 (Rs 2,70,037) and 83 per cent cheaper than the Hyundai Eon (Rs 3,02,472). However, the Alto 800, India’s largest selling model, has a bigger engine (796 cc), generating 26 per cent more power than the Nano (38 ps). Though the Maruti 800 is cheaper than the Alto, it isn’t available in markets such as Mumbai.

A Tata Motors spokesperson confirmed additions to the Nano, based on feedback from customers, would result in higher prices.

“Highly regarded as an automotive innovation globally, the Tata Nano will witness a lot of new developments to suit our customers. These will be additions the customer really wants and is willing to pay for. The costs will go up, but we will look at ways to control those so that we don’t lose the value proposition,” the spokesperson said.

Since the Nano’s commercial launch in mid-2009, Tata Motors has been selective in passing on raw material and inflation-related price rises to the Nano. However, other models such as the Vista and the Manza have seen regular price increases. The 2013 model of the Nano has remote keyless entry, twin glove boxes and a four-speaker music system, with bluetooth and several engineering improvements. However, the price increase for the top model was just Rs 3,200. Last year, the company added features worth Rs 25,000 on a special edition of the car, but didn’t raise prices.

“We have done a lot of research, both internally and externally. Our teams have constantly spoken to Nano customers for feedback. The new Nano has evolved, with new features recommended by customers. The new-generation Nano has evolved as a smart city car,” said the company spokesperson.

Since the last two years, Tata Motors has explored ways to draw people to the Nano. These range from exchange offers against two-wheelers, down-payments of as low as Rs 15,000, equated monthly instalments of less than Rs 3,000, sales through swiping credit cards and retailing through dozens of kiosks in rural areas.

However, despite these efforts, Nano sales continue to dwindle. At 952 units, sales in November were the model’s second-lowest this year, after April.

So far this year, Nano sales stand at 13,274 units, a fall of 72 per cent compared with 47,130 units in April-November last year, according to data by the Society of Indian Automobile Manufacturers.

FROM ‘CHEAP CAR’ TO ‘SMART CITY CAR’

* The company is working on a diesel variant of Nano and also on a bigger petrol engine, compared to the current two-cylinder 624-cc engine

* Recently, another version of the Nano, one with a compressed-natural-gas engine, was launched

* Despite several efforts, such as offering the vehicle at down-payments of as low as Rs 15,000, Nano sales continue to dwindle