India's Ratan Tata sees brighter future for upmarket Nano

AFP
New Delhi
First Published: 14:17 IST(3/12/2013)
Last Updated: 14:20 IST(3/12/2013)
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India's struggling Tata Nano, billed as the world's cheapest car, could still have a strong future with a more upmarket image, says Tata group tycoon Ratan Tata, as the company looks to give the hatchback a new start.

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Tata told US business channel CNBC late Friday he still had high hopes for the tiny Nano in its home market and abroad.

"A re-launched Nano with some of the differences that we're trying to incorporate, yes I do" believe it has good prospects, Tata said.

"We are going to relaunch the car not as the cheapest car" but with a different "image", Tata said, without giving a timeframe.

When Tata Motors -- part of India's giant Tata group -- launched the Nano in 2009, analysts said it would revolutionise how millions in India travelled. But after poor sales, it become clear the car's unique selling point -- its price -- had backfired.

Tata said the branding of the jelly-bean shaped vehicle as the world's cheapest car was a mistake.

"It became termed as a cheapest car by the public and, I am sorry to say, by ourselves," Tata said, calling the branding "unfortunate".

Rather than embracing the Nano, the poorer but still status-conscious customer base the car was targeting largely shunned the "cheap" tag and opted for slightly pricier rivals.

The base model initially sold for a price of 100,000 rupees ($1,600).

"The Nano should have been marketed towards the two-wheeler owner," said Tata, who trained as an architect and worked closely on the design.

It was "conceived to give people who rode on two wheels with the whole family an all-weather safe form of affordable transportation, not the cheapest", he said.

Families of four and five are regularly seen balancing precariously on motorcycles weaving through India's notoriously lethal congested traffic.

"Maybe it could get launched in another country like Indonesia, where it doesn't have the (cheap) stigma and the new image comes back to India," Tata said.

"Or maybe it could be launched as a changed product that gets marketed in Europe. There's a lot of interest in the Nano outside India," Tata said.

Tata Motors, which also produces the successful British luxury Jaguar and Land Rover marques, had aimed to sell around 25,000 Nanos a month. But between April and October, it sold just 12,322 units.

The base model, sold without air conditioning, now costs 145,000 rupees.


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