Tata Nano production falls: The journey of India's cheapest car

PANORAMA

Tata Nano production falls: The journey of India's cheapest car

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With just one unit produced in June, Tata Motors' small car Nano might be inching closer towards a closure; a look at its journey:

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The 1-lakh carThe Tata Nano was launched in 2009 as part of then-Tata Group chairman Ratan Tata's dream of providing a car to the masses.Though touted as a Rs 1-lakh car, only a few customers got this car at that price. In 2017, the ex-showroom price for Nano was around Rs 2.25-3.20 lakh.

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The launchThe small car was Ratan Tata's brainchild and was aimed at giving a safer and affordable alternative to families riding on two-wheelers.In 2005, Tata Motors started work on the Nano and finally delivered it in 2009. Ahead of the launch, Tata Motors received 203,000 bookings through lottery system.

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From Singur to SanandTata Motors had spent $400 million just on developing the car. It had to shell out a fortune once the manufacturing unit was shifted from Singur in West Bengal to Sanand in Gujarat.

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Smallest carThe size of the Nano-egg-shaped, and just three metres long- made it a practical choice for Indian cities, where parking is often restricted and spots are cramped. The Nano is 8% smaller but has 21% more space than Maruti 800.

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Market disruptor A CRISIL study in 2008 stated that the 2009 debut would greatly affect the used car market. According to reports, car prices in the same bracket did drop 25-30% prior to the launch. Sales of the Nano's nearest competitor, the Maruti 800, fell by 20 per cent immediately after its launch.

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Lost faithA few cases of fire and other technical defaults proved to be a dent in Nano's image and created a negative perception that the affordable car was not that "safe.

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Sales downtrendAt the time of launch in 2009, Tata Motors expected to sell 250,000 units per year. But the sales never went beyond 74,527 units (in FY 2012). The sales declined rapidly year on year.

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Mistry's ousterProduction of the Tata Nano was one of the major issues which led to the ousting of Tata Group ex-chairman Cyrus Mistry. Mistry had cited mounting losses of Rs 6,400 crore to be the key reason behind the poor performance of Tata Motors, which led to "mismanagement" at the Tata group.