As Cyrus Mistry came down heavily on Ratan Tata today, writing a letter to the directors of the Tata Group, he spoke of the Tata Nano project , which was the pet project of the former. He said that the word’s cheapest car project, whose product development concept called for a car below Rs 1 lakh, but the cost was always higher and it had “consistently lost money, peaking at Rs 1,000 crore”.
He further said that as there was no line of profitability for Nano. Any turnaround strategy for Tata Motors required it to shut it down, but was not done due to emotional reasons. Cyrus Mistry further said that another challenge in closing the project was that it would stop the supply of the Nano gliders to a company that makes electric cars, which Ratan Tata has a stake.
The car was the brainchild of Tata group chairman Ratan Tata. The company had first set up factory in the Singur district of West Bengal, which was then under the control of the Left parties.
However, while Singur at that time was getting international attention, for being the one of six places from where world’s cheapest car was supposed to be rolled out, a major controversy was in store. It was related to land acquisition of poor farmers. Apparently, the state government at that time flamed a controversy by using 1894 land acquisition act rule to hand over land to the Tata group to build its factory, which was opposed by the poor farmers and Trinamool Congress led by Mamata Banerjee. It was then that Tata group shifted its factory to Sanand city of Gujarat, from where the first car was rolled in the year 2009.
Ever since, it was launched, Tata Nano sales have hardly been worthwhile. Today the car is largely ignored by buyers. The vehicle was tagged as ‘aam aadmi’ car to give competition to two wheelers but that clearly didn’t happen.