Reference Auto

With the Tata Nano becoming a Rs 2 lakh car within just two years of its launch, will Tata Motors see its people’s car image take a beating as the Nano loses its famous Rs 1 lakh car tag. Tata Motors said it raised Nano prices by nearly Rs 9,000 owing to a jack-up in interest costs in the last two years.

The move could also make the Tata Nano vulnerable to intense competition (in its category) as auto majors such as Bajaj, Nissan and even Maruti Suzuki are planning to launch small cars to take on the Nano and also grab a share of India’s motorcycles market.

This step by Tata Motors will make the ex-showroom price of the top-end Nano, which is the largest selling variant, Rs 2.01 lakh in Mumbai. However, the standard version will be priced Rs 1.49 lakh. But in Delhi, the prices will be far cheaper at Rs 1.88 lakh (for top-end) and Rs 1.37 lakh (base model). The prices have come into effect from November 1. This is the second time that the company has increased price of the Nano.

The Nano continues to be the cheapest car even after this hike, with sales on a slow rise over the last few months. Sales of the small during October 2010 stood at 3,065 units, up a tad 2 per cent.

Tata Motors is also eyeing tier II and III cities in a big way to rev up Nano sales. To boost sales further, it is exchanging two-wheelers for the Nano, which will help Tata Motors grab a small pie in the motorcycles segment.

Tata Motors had increased price of the car by four per cent in June. It recently started open sales in Kerala, Karnataka, Maharashtra, Uttar Pradesh and West Bengal. As of now, it has sold 67,000 Nanos (as of September 30).

There has been buzz that Maruti Suzuki is mulling a stripped-down variant of India’s largest selling car, the Alto. This could bring the Alto within striking distance of the Nano (so far as the price goes). But Maruti is yet to confirm such a plan.

Tata Motor’s image was dented after a whopping six of its brand new Nanos caught fire just after they were rolled out of the showroom. But the Tatas had downplayed the incidents. Moreover, delay in deliveries and unavailability of parts owing to shifting of vendors from Pantnagar to Sanand have also taken a toll on Nano sales.

Also, Tata Nano bookings are not open for all states. The auto major is taking bookings from five states - West Bengal, Maharashtra, UP, Kerala and Karnataka.

Apart from this, the company said a number of customers from the first phase of bookings had postponed deliveries and wanted their cars delivered on auspicious days of the festive season. Tata Motors’ Sanand plant will become operational in March next year after which bookings will resume.

While launching the Nano, Tata group chairman Ratan Tata had said that when he saw a family in a motorcycle on the roads he dreamt that it would own a car one day and that the Nano was indeed their dream car. But considering the rate at which the Nano prices are soaring, Ratan Tata’s dream will most likely remain a dream.