Tata Motors on Friday said it will increase the prices of its small car Nano, dubbed as the Rs 1-lakh wonder, by about Rs 9,000 with effect from November 1 to offset rising input costs.
This is the second time that the company has increased the rate of the car. In July this year, the company raised Nano's price by 3-4 per cent, translating into a hike ranging between Rs 3,700 and Rs 6,894 (based on ex-showroom, Delhi prices).
"Tata Motors is taking a minor price increase on the Tata Nano, effective from November 1, to partially neutralise the steep increase in input costs in the last two years. The average increase is about Rs 9,000 (ex-showrooms), with prices varying from city to city and model to model," the company said in a statement.
When contacted, a company spokesperson said the price increase will be applicable only for the cars available through open sales and new bookings.
"As of now, Tata Motors has announced open sales of the Tata Nano in Kerala (since August 2010) and Karnataka, Maharashtra, Uttar Pradesh and West Bengal (since October 2010)," the company said.
Tata Motors had earlier said the first one lakh customers are price-protected and they would get their cars at the announced price of Rs 1.23-1.72 lakh (ex-showroom, Delhi). The delivery of these cars is scheduled to be over by 2010.
Increasing input costs, especially that of steel and other commodities like rubber, had put pressure on margins of all the automakers. Several rounds of increase in automobile prices have taken place since January this year.
Tata Motors had said with its 2,50,000 units per year Sanand plant becoming operational, the company would ramp up production of Tata Nano. Before this, it has been producing the 623-cc car from its Pantnagar plant in limited numbers.
Forced to shift from its original plant at Singur in West Bengal to Sanand in Gujarat, Tata Motors had decided to take bookings of the Nano in April 2009 through a lottery system due to production constraints, and selected 1.55 lakh customers for the delivery of the car in two phases.
The shares of the company today fell 2.61 per cent and closed at Rs 1,159.45 a share on the Bombay Stock Exchange.