Nano failed to meet people's aspirations, says Maruti chief

Nano cars are seen at a Tata Motors manufcturing plant at Sanand near Ahmedabad. File photo  

Ratan Tata’s dream project of building a Rs 1 lakh car, the Nano, for India’s teeming masses has failed in its ‘totality’ as it was unable to meet the aspirations of families travelling on scooters, the chairman of India’s largest car maker Maruti Suzuki India Limited R.C. Bhargava said on Thursday.

Mr Bhargava’s comments assume significance in light of recently ousted Tata group chairman Cyrus Mistry’s assertion that the group’s ambitious but faltering Nano project with losses of at least Rs 1,000 crore wasn’t being shut down not just for ‘emotional reasons’, but also affect an entity in which Mr Tata has a stake and uses Nano gliders for its electric cars.

“I think what has happened is, while the concept and intention behind Nano was very excellent and laudable… Mr Tata genuinely felt sorry for those families that were travelling around on a scooter,” Mr Bhargava said in response to a query about the Tata Nano.

“But I think the product at that price became somewhat of an insurmountable challenge to meet that price level and also meet the expectations and aspirations of a car buyer. Because a car buyer is not only looking for a means of transport, they want a little bit more than just a mode of transport,” Mr Bhargava said, stressing that both Maruti and Suzuki believed it was not possible to produce a car with the Nano’s specifications and pricing.

“People are looking for something beyond just transport. I think the Nano failed to meet the aspirations of the car buyer in its totality, maybe not in terms of one or two facets, but in its totality,” he said.

If a mode of transport was the only aspiration for people, then so many different types of cars, including luxury cars in varying designs and colours, would never sell, said the chairman of Maruti Suzuki whose market capitalization is now upward of $26 billion.

“We have always said we could not produce a Nano at that price point. We do try and produce cars at the lowest cost cars that we can, but that’s the best we can do,” said Mr Bhargava in a media interaction at the Foreign Correspondents’ Club in the capital.

In his letter to the Tata Sons board last week, Mistry had grimly noted: “The Nano product development concept called for a car within Rs 1 lakh, but the costs were always above this. This product has consistently lost money, peaking at Rs 1,000 crore. As there is no line of sight to profitability for the Nano, any turnaround strategy for the company requires to shut it down. Emotional reasons alone have kept us away from this crucial decision.”

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Printable version | Oct 23, 2020 2:56:04 AM |

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