Reference Auto

The Tata Nano’s sales have been dwindling for quite some time and it plummeted to a low of almost 500 last month, forcing a rethink by Tata Motors, which albeit late, has set the ball rolling to introduce an upgraded variant of the car in the market soon.

The upgraded version of the world’s cheapest car will come with power steering and a five-speed gear box to give a fillip to fuel economy and bring stability during high speed driving. The new version is set to be rolled out within six months and will also come with adjustable seats.

A Tata Motors official said the company had charted plans to upgrade the Nano based on feedback given by customers. The upgraded variant will still be priced lower than the Maruti Suzuki Alto, which is the highest selling car in India. The new Nano is likely to carry a price tag of 10-15% more than the existing variant.

A couple of days back, Tata Motors came up with a four-year manufacturers warranty scheme for both new as well as existing cars.

Under the ‘Nano Happiness Guarantee’ plan, Tata Motors has planned to double warranty lengths of the Nano for four years or 60,000 km and started a Rs 99-a-month maintenance option to keep check on running costs. The auto major had previously been offering a warranty for 18 months or 24,000 km, with zero maintenance on the car which carried a price tag of Rs 1.23 lakh (the base model).

From a sales figure of 9,000 units in July this year, the figure tanked every month and plummeted to a low of 509 units in November. The main reason for this was the fire incidents, which made customers wary of the Nano’s safety. Tata Motors launched various campaigns and tried to assure potential buyers that the Nano was safe but in vain.

Tata Motors earlier requested Nano buyers to bring their cars back so that safety devices could be installed to prevent future fires but denied it was a recall. Tata Motors probably would have had to call the move a ‘recall’ had these incidents taken place in developed markets like the US and Japan.

Meanwhile, Tata Motors is weighing the possibility to sell the Nano in the Taiwanese market. Theodore Huang, who is chairman of the Teco Group in Taiwan, has shown keenness in introducing the car in the country’s market as he feels that the Nano imported from India will still be cheaper than the cheapest car already available in Taiwan which comes for T$400,000.

After import, Tata Nano will cost just above $150,000. But will these incidents in India force Taiwanese buyers to stay away also?

In India, for the Tata Nano to take over the Alto as the highest selling car, Tata Motors will have to go on an exhaustive damage-control mode and these offers, along with the recent warranty offered, could just be an initial move. Tata Motors needs to do much more to pick itself up from the loss of face it suffered owing to the fire incidents of the six brand new Nanos.

Despite being the cheapest car in a highly price-sensitive market like India, it is bewildering that the Nano is behind the Alto so far as sales go and this is something Tata Motors officials need to ponder about.