Thursday, February 2, 2012

Tata Nano sales continue to grow! Clocks 7,723 units in January 2012!

The Tata Nano’s sales have climbed for the fifth consecutive month, in a very positive sign for both the small car and its parent company, Tata Motors Limited. The Nano registered 7,723 units in January 2012, a marginal improvement over the 7,466 units that Tata Motors dispatched to Tata dealers across the country. Tata Motors recently launched the upgraded 2012 Nano, which brought in a host of improvements, right from the interiors to the gear ratios of the car, very crucially without any increase in the price of the car.

2012 Tata Nano LX

Along with the big improvement in the Nano, Tata Motors has been offering attractive discounts and down payment offers on the 2012 Nano to push sales. Another effort from Tata Motors has been the push into rural areas of India with standalone Nano kiosks, taking this budget hatchback closer to people, which seems to slowly be delivering results with sales growing steadily over the past few months. That said, the Nano is still quite a mile away from being a profitable venture for Tata Motors and this is what will be bothering the powers to be at Tata.

Small cars sell at wafer thin margins and more so the Nano, which is the least priced car, not just in India, but the whole wide world. This means that Tata isn’t really making money on the Nano considering the volumes that this car is doing. After setting up a factory plant capable of producing over 250,000 Nanos a year, more than 75% of the capacity at Tata Motors’ plan at Sanand, Gujarat is unused. Typically, Tata needs to use at least 60% of the capacity to stay profitable with the Nano. This, evidently isn’t happening currently.

The diesel Nano, which will be Tata’s hope will not be here until 2013. But before that, another option for Tata would be the CNG version of the Nano, which the automaker showcased off at the 2012 Indian Auto Expo. The Nano CNG might be good alternative to the diesel engined Nano for the time being, in bigger cities and towns at least, where CNG is more easily available. The sooner Tata makes the CNG Nano available widely, the better for the brand. Tata also showcased a Nano with disc brakes at the Auto Expo, perhaps an inkling of things to come from Tata in the future.

Source: ICB

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