Tata Motors? small car Nano, which has begun its overseas journey with Sri Lanka, is being sold at a starting price of Lankan Rs 9,25,000 for the base model, or around R3,78,656, more than twice its price in India. Nano is priced around R1.40 lakh in India for the base model in New Delhi. In Sri Lanka, Nano’s top-variant LX is priced at Lankan Rs 1,100,000, or R4,50,493. The prices are inclusive of VAT applicable in Sri Lanka. The Nanos travel as completely built unit (CBUs) and carry the same two-cylinder 624 cc engine and features existing in the Indian market.

?The duty structure in Sri Lanka is different from India,? explains Yasantha Wijesekera, business unit manager, Diesel & Motor Engineering (Dimo), Tata Motors?s distributor in Sri Lanka. ?The car will attract VAT of 12%, customs duty, insurance charges and shipment charges, among others, before it arrives in the showroom for sale.? ?Customers have been eagerly waiting for the Nano and we have got a good response,? he said, adding that the first shipment of 500 cars has already arrived in the market. ?Nano is a unique product for the market and we do not see any direct competition for it,? he said.

In India, Nano’s sales for April touched its highest ever, at 10,000 units. It settled down to over 6,000 units in May.

?The Tata Nanos, being exported to Sri Lanka, are made at the Sanand plant. That is how exports operations will be continued. We certainly have a robust plan, corresponding to market potentials, but it is internal to the company,? said a spokesperson from Tata Motors on a query on the possibility of completely knocked down (CKD) operation.

Considering that the total private car registration was a little above 5,000 units for 2009 in the Lanka and the market being highly price-sensitive, Nano is seen to not only boost demand for vehicles in the country but also expand Tata Motors’ passenger car business in the country. According to Dimo?s annual report 2009-10 (on the website), the Tata Motors’ passenger car business in Sri Lanka was impacted due to inability to offer a new product at a competitive price.

?Unless there is a favourable change in the tariff, growth in this sector will be minimal. Arrival of the Nano from Tata is eagerly awaited to boost the performance of this business unit,? read Dimo?s annual report.

Meanwhile, the other markets the company may be looking to enter include Malaysia and Thailand. The company had been reportedly looking at tying up with Malaysian carmaker Proton for marketing Nano.