To be or not to be. That’s the million dollar question currently being debated in the house of Tatas since it involves the future of Nano, the small car that made global headlines a decade ago.
A product of Indian frugal engineering and created out of Ratan Tata’s vision to provide affordable, safe travel for Indian families driving around on scooters, the Nano is no mean achievement. Initially produced and sold at ₹1 lakh, a lot of sentiment is attached to it.
Though there is hardly any demand now for this car, pulling the plug has not been so easy. The future of the Nano is an emotional issue at the Tatas. Direct answers to questions on its future are difficult to come by.
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New crash norms
“Nano cannot be continued in its present form beyond 2019 as the new crash norms [for existing models] will kick in,” said P.B. Balaji, chief financial officer, Tata Motors, last week, while answering a question on the future of the Nano. Will the be resurrected in a different form?
According to the government’s new crash norms, all existing car models will have to meet higher crash standards from October 2019.
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Besides, the BS VI emission norms will be applicable from April 2020 and if Nano is to be continued, it will need to have a new engine. All these entail heavy investment for a car that is not notching up great sales.
At Tata Motors’ AGM (annual general meetin last week in Mumbai, Tata group chairman N. Chandrasekaran said upgrading the Nano to BS VI standards will be a costly affair. He, however, did not spell out what was in store. To achieve cost efficiency and financial turnaround, Tata Motors has decided to confine its passenger vehicle production to only two platforms — Alfa and Omega — from which different models will be churned out. Thus, all the existing models will be gradually phased out or upgraded.
“Going forward, all the investment will go into [these] two new architectures. We will upgrade all the models to new emission norms. Based on business cases, investment decision will be taken,” Mr. Chandrasekaran said, answering shareholders’ queries. He said the objective was to have a host of attractive cars that will ultimately sell in the market.
Decline in Nano sales
Nano sales are on a constant decline. In June, the company sold just three cars. In July, 50 Nano cars were manufactured.
“The hatchback segment is very important for us and the regulations and customer preferences are going to play a major role in defining various sub-segments within this segment,” a Tata Motors spokesperson said.
“We already have a well-defined Passenger Vehicle strategy in place that will look at not only the best way of addressing the segments’ requirements but also an overall perspective of the portfolio. We continue to produce Nano catering to customer demand in key markets,” the spokesperson added.
Again there is no clarity. So, while sceptics have already started writing Nano’s obit, one never knows, the Tatas may spring a surprise.