World's cheapest car, Tata Nano, is being 'refreshed' to realise its full potential, says group Chairman Ratan Tata.
A Nano car belonging to one of its first owners, S K Thirani, is seen on the road after being driven out of a showroom in Mumbai.
"We were not prepared to market the car as we should have. I think that has a lot to do with the fact that momentum got lost," he told PTI in an interview.
He listed out the reasons due to which Nano, nick-named 'The people's car', could not realise its full potential as the momentum got lost in initial years due to issues like plant transfer and insufficient advertising campaign and dealership network.
Asked whether these issues are being addressed, Tata said, "It is being addressed now and I think we will succeed. It is a three-four year old product (and) we have to do something to refresh the product, which we are also doing."
To a query as to what went wrong with Nano, which was promised as 'people's car' with a price tag of Rs. one lakh and that hit the road in 2009, he said there were "several things", including the events in West Bengal.
"It caused us to move and caused us to build another plant. That cost us another year from the time of the launch which created a lot of excitement and three months from that launch date, the car should have been on roads.
"Instead, because of those events it went on the road a year and half after that event," Tata said.
Nano was originally planned to roll out from a plant in Singur, West Bengal, but the plant had to be shifted to Sanand in Gujarat after political protests at its earlier plant.
The first Nano rolled out from a factory in Pantnagar in Uttarakhand in 2009, while output from Sanand plant began about a year later in June 2010.
The car was launched with an initial ex-factory price tag of close to Rs. one lakh for the basic model while the current ex-showroom price here is in the range of Rs. 1.55-2.16 lakh.
Tata Motors has sold more than 2.2 lakh units of Nano since its launch, while sales grew by 5.8 per cent in the last fiscal ended March 31, 2012 to 74,521 units.
Tata said, "The next issue was when it went on the roads, we had an order with payments for 3,20,000 vehicles, which would have taken from zero ramping up 18 months to do. So we decided we would restrict the orders to 1,00,000 and we would have a lucky draw to decide who got the vehicle.
"When this 1,00,000 were over, we were in a normal market condition and the company did not seem to have prepared itself. There was no advertising campaign in place, we had not looked at creating more dealers...
".... we had a lot of cars to sell and the product was oriented to be semi-rural and rural areas of the country and we had not done anything to building dealership network to handle that.
"So suddenly, from pre-order of a large amount, we had nothing. We were not prepared to market the car as we should have. I think that has a lot to do with the fact that momentum got lost," he said.
As per the company's latest monthly sales figure, Nano sales stood at 3,503 units in November, as compared to 6,401 units in the year ago period. The cumulative sales for current fiscal till November were 47,130 units, up from 39,646 in the year-ago period.
As per Tata Motors' annual report for 2011-12, measures were taken during the year "to increase market penetration by establishing low-investment dealerships in interior towns."
"With focused initiatives to increase reach and penetration, by appointing Nano exclusive dealers, the company is targeting rural customers to drive growth," Tata Motors said, while adding that it has also started exporting Nano to neighbouring countries such as Nepal and Sri Lanka.