There is a reason ousted Tata Sons chairman Cyrus Mistry went after the Nano. Data from the Society of Indian Automobile Manufacturers says it may have been the cheapest car around but not the hottest. Its sales dropped 70% over the last six years.
In an email on Tuesday to the Tata Sons board, Mistry said there was no “sight of profitability” for the car and the only way out was to scrap it. However, it continues for emotional reasons and because it supplies parts to an electric car company part-owned by Ratan Tata.
But Tata Motors insiders say Ratan Tata, Mistry’s predecessor as Tata Sons chairman and the driving force behind the Nano, had a plan to turn the car’s fortunes around. But the plan did not take off after he made way for Mistry in December 2012.
“There was a lot of research and development on the Nano platform… There were plans to use it to develop an air car (which uses compressed air to drive), and hybrid and electric cars,” said one of them.
Tata Motors was working with Norwegian electric vehicle and component maker Miljøbil Grenland. It picked up 67% stake in the company. Tata said that it will give five bodies to Miljøbil Grenland.
For the air car, Tata Motors was working with French form Motor Development International on a seven-year project. After 2010, Tata Motors gave Miljøbil Grenland funds to develop the battery technology.
Tata also had plans for an automatic version. Also, the cars that were to be exported to Latin America and Europe would have been feature-rich.
Eventually, Tata Motors sold all its shares in Miljøbil Grenland to the Canadian lithium cell manufacturer Electrovaya.
In 2015, Ratan Tata had made another investment in Ampere Vehicles, makers of electric two and three wheelers. The company denied having bought any Nano body shells from Tata Motors.
“There were few technology learning from the Nano, but you cannot cut corner in building a car… The current car was not safe,” said Deepesh Rathore, London-based analyst of Emerging Markets Automotive Advisors.
Automobile industry experts say the Nano is nothing to be ashamed of. “The Nano was developed to tackle a phenomenally bold challenge at an unheard-of price. It is not uncommon for pioneers to fail,” said an former Tata Motors executive who had worked on the Nano project.