To look for fresh capacity for Nano, says Tata Motors | business | Hindustan Times
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To look for fresh capacity for Nano, says Tata Motors

Auto major Tata Motors today said it will look for fresh capacity for its small car Nano as it expects the Sanand plant in Gujarat to run at full capacity "within a few months."

business Updated: Apr 09, 2011 17:10 IST

Auto major Tata Motors today said it will look for fresh capacity for its small car Nano as it expects the Sanand plant in Gujarat to run at full capacity "within a few months".

"The Nano sales have been very good. Last month, we sold over 8,700 units and within a few months time we will be running the full capacity of 20,000 units per month at the Sanand plant," Tata Motors Vice-President (Commercial), Passenger Car Business Unit, R Ramakrishnan told reporters here.

Currently the company is producing about 12,000 units a month in a double shift at the plant. The Sanand facility has a capacity to manufacture 2.5 lakh units annually, which can subsequently be increased to 5 lakh units per annum. Once it hits peak capacity, the company would have to consider adding fresh capacity for the Nano to meet demand, he said.

Asked if the fresh capacity could be added at the Sanand plant itself, or whether the company would consider producing at its Pantnagar plant, where it used to produce the Nano in limited quantities, he said options are open for the company.

"Where we would add the fresh capacity will be decided in due course of time, but the advantage that we have is the flexible production capability for Nano that we have," Ramakrishnan said.

In March, Tata Motors sold 8,707 units of the Nano, 85 per cent more than in the same month last year. He said the company is receiving over 1,10,000 enquiries about the Nano a month from across India and the company expects an increase in the number of first-time car buyers actually purchasing the Nano.

"When we started, around 80 per cent of Nano customers were buying it as a second car and 20 per cent were first-time buyers. Now the ratio is about 50:50," he said. "Ultimately, we are looking at 80 per cent first time buyers purchasing the car, which is what we had aimed when we started off," Ramakrishnan added. Asked if the company planned to hike the price of Nano considering rising input costs, he replied in the negative, but said margins were under pressure. Except for the Nano, Tata Motors had hiked prices of its passenger vehicles by up to Rs 36,000 from April 1.

Ramakrishnan also said the company expects the sales of its Indica hatchback to pick up after suffering a slump last year due to the non-availability of Bharat Stage-IV compliant version. "Now that we have the Indica eV2, which is BS-IV compliant, we expect to make up for the loss we had last year, as most of the sales are in the cities where the BS-IV norm is followed," he said.