Ratan Tata had grand plans for the Nano – ones that included getting the car to run on compressed air and batteries! According to a report in HT, Ratan Tata had a big turnaround plan for Nano, which did not materialise because he (Tata) handed over the reins to Cyrus Mistry back in 2012. Nano, touted as the cheapest car in the world, is Ratan Tata’s dream project. However, the car’s sales had dropped by as much as 70% over the past six years.
Sources in Tata Motors told the paper that a lot of research had been done on the development of a new Nano platform that would enable the car to run on compressed air, and electric and hybrid varieties. According to the report, Tata Motors had been working with Motor Development International from France, for a 7-year project. This collaboration was mean for the ‘air car’. Ratan Tata also wanted to make a feature-rich Nano, especially for the Latin America and Europe.
But, Cyrus Mistry saw only losses in the overall Nano project, as is evident from the letter that he wrote to the Tata Sons Board, soon after his sacking. Blaming Ratan Tata of keeping the Nano project alive, only for emotional reasons, Cyrus Mistry said that there was no sight of profitability when it came to that car. “…the Nano product development concept called for a car below Rs. 1 lakh, but the costs were always above this. This product has consistently lost money, peaking at Rs. 1,000 crores. As there is no line of sight to profitability for the Nano, any turnaround strategy for the company requires to shut it down,” Mistry wrote. ” Emotional reasons alone have kept us away from this crucial decision. Another challenge in shutting down Nano is that it would stop the supply of the Nano gliders to an entity that makes electric cars and in which Mr. Tata has a stake,” he alleged.
Mistry has said that as the group chairman, he tried to turn things around – be it from a Nano to an ultra-mega-power plant. Mistry has hit out at Ratan Tata, his predecessor, for interference. Mistry has lamented that Ratan Tata’s interference had increased to the extent that he (Mistry) was reduced to being a ‘lame-duck’ chairman. In one of the biggest upheavals in the corporate sector, the Tata Sons Board on Monday appointed Ratan Tata as the interim chairman of the group, replacing Cyrus Mistry. The Board has constituted a Selection Committee to choose a new Chairman.