Why Nano exceeded its price of Rs 1 lakh
Prior to the launch of Tata Nano in 2008, there was much hype about the world's cheapest car, popularly called 'lakhtakiya' car. However, Tata could not stick to the price tag of Rs 1 lakh for too long due to increased production costs.
- Oct 27, 2016,
- Updated Oct 29, 2016 10:02 AM IST
In a five-page letter to Tata board, ousted Tata Sons chairman Cyrus Mistry on Wednesday expressed that Ratan Tata's dream project Tata Nano should be shut down as it has lost value.
"The Nano product development concept called for a car below Rs 1 lakh, but the costs were always above this. This product has consistently lost money, peaking at Rs 1,000 crores," Mistry detailed in his letter.
Under Mistry's reign Nano was repositioned as a Smart City Car in 2014 to revive its sales.
Further, Mistry even renamed it GenX Nano in 2015 and targeted the youth, re-launching it at a price of Rs 1.99 lakh and marking the end to 'cheapest car' tag.
The GenX Nano which took two years to develop, came with features such as boot access, Bluetooth connectivity and even an automatic variant.
Nevertheless, the Nano sales failed to turn around with only 4,459 units sold in the first seven months of FY16-17 as compared to the 11,321 units that was sold in the previous fiscal.
This plunge in sale figures, despite the aggressive pricing, was mainly because of increasing costs.
In a five-page letter to Tata board, ousted Tata Sons chairman Cyrus Mistry on Wednesday expressed that Ratan Tata's dream project Tata Nano should be shut down as it has lost value.
"The Nano product development concept called for a car below Rs 1 lakh, but the costs were always above this. This product has consistently lost money, peaking at Rs 1,000 crores," Mistry detailed in his letter.
Under Mistry's reign Nano was repositioned as a Smart City Car in 2014 to revive its sales.
Further, Mistry even renamed it GenX Nano in 2015 and targeted the youth, re-launching it at a price of Rs 1.99 lakh and marking the end to 'cheapest car' tag.
The GenX Nano which took two years to develop, came with features such as boot access, Bluetooth connectivity and even an automatic variant.
Nevertheless, the Nano sales failed to turn around with only 4,459 units sold in the first seven months of FY16-17 as compared to the 11,321 units that was sold in the previous fiscal.
This plunge in sale figures, despite the aggressive pricing, was mainly because of increasing costs.