RIP, World’s Cheapest Car Tata Nano Production Is Shut-Down

Buying our own car is a dream of every individual, but when we look at there price at some point we get disappointed. To make this dream reality –that every individual will have there own car, Ratan Tata made a promise to world that Tata Motor will soon launch world’s most affordable car. With that promise in 2008 Ratan Tata launched Tata Nano. The launched price of Tata Nano not only blow my mind but of whole world too. The launched price of this sweet compact city car was just one lakh rupees, which would be about US$1,500.

When we all are thinking and even Tata Motors that now every man will have his own car, things soon start to show negative results. At the time of launch Tata Motors planned to sell 250,000 units per year. In year between 2011-2012 the maximum sales achieved by Tata Motors was 74,527.

But after 2012 sales starts to declined rapidly. In the first two years several Nano cars caught fire. Tata motors handle this issue by offering an extended warranty for both new and existing cars. But trouble doesn’t stop there for Tata. Soon after that incident Tata Motors have to shift there production plant from Singur, West Bengal to Sanand, Gujarat. Shifting of production plant not only delay the production of cars for 18 months but also increases it’s price.

This are all those things which deadly affects the sales of any product and Tata Nano was not exceptional. Tata Nano Sales starts to decline after 2012. The declination in sales continues for years and yeas. Things has been gone so worst that in June 2018 only one Nano car was get assembled against the 275 assembled in June 2017. Exports were zero, versus 25 in June 2017. Domestic sales of Tata Nano this financial year stands at 1,493 units which is down by about 71 percent. The company acknowledged that the car in its present form cannot continue beyond 2019.

The sales numbers are going low and low. Ratan Tata’s dream project of making the most affordable car for Indian families too might fade away.

The production of the Tata Nano from Sanand plant in the month of October 2017 recorded a total of 74 units. In the ongoing financial year 2017-18 (April – October 2017) the company has manufactured 1,299 units as against 5,380 units in April – October 2016 period.

A spokesman for the group said the Nano “may need fresh investments to survive.” Yet the evidence suggests that pursuit of the lowest price above all else was misconceived. A more realistic view is that India is squarely a high-volume, few-models game and consumers are focused on value – which means getting as many features as possible for their money.

If we talk about sales of passenger vehicles belonging to Tata brand then there is no need to worry. The sales numbers are clocking higher and higher with every passing day. Barman stated that “Compared to the one percent growth made by the industry in the year 2016-17, we grew at 34 percent. The next year i.e in 2017-18, when the industry grew at 11 percent, we grew at 45 percent. In the first quarter of 2018-19, the industry grew at. This year we looking to grow in excess of 50 percent”

Currently, about 4500 workers work in two shifts at the facility.

In many cities Tata Motors are offering heavy discounts on Tata Nano, to clear out its existing stocks. Tata Motors also stopped placing order for Tata Nano in most parts of the country. The suppliers are not blocking any production of Tata Nano. According to Business Standard Report  Tata Motors will still manufacture the Tata Nano, but only on customer demands.

If we look at automobile market then from motorbikes to cars and trucks, growth in every segment is showing massive growth. Passenger vehicles, including SUVs has jumped 38% in June where as commercial vehicles climbed 42%, while two-wheelers gained 22% growth.

Tata Motors also thinking on a idea of recasting the Nano as an electric vehicle. Currently Tata Motors is working on electric car ‘Tata Tigor’ for the EESL tender. We expect to see the production version of Tata Tigor in December 2017.  Tata Tigor will weight almost 200 kgs less than the regular Tata Tigor variants. It will be powered by a 85 kW electric motor and the car. It will be powered by the 1.2-litre turbocharged three-cylinder petrol engine, borrowed from the Tata Nexon.

The biggest barriers in between electric cars and there sales, are there high costs. Which make this technology unsuitable for an ultra-low-price brand.

The high initial price gap means that “we do see a need for incentives to kick-start EV adoption,” analysts at Goldman Sachs Group  ..

Before the stop of production, the lowest on-the-road price of a Nano in Delhi is quoted at Rs 2.59 lakh, compared to the cheapest Alto 800 going at Rs 2.88 lakh.

Have a great day, Enjoy !

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