Nano sales to race ahead of Alto

Written by Vrishti Beniwal | New Delhi, Jan 24 | Updated: Jan 25 2008, 06:04am hrs
Nano is expected to surpass the sales of Indias largest selling car, Alto, by FY10, if it delivers on the performance criteria, say analysts. Maruti Suzukis Alto, currently selling at an on-road starting price of Rs 2,58,000, has domestic sales of up to 23,000 units per month. Nano, set to hit the roads in the latter half of FY09, could get twice those volumes beyond FY10.

According to brokerage firm CLSA, Nano has clearly scored on the looks parameter, and if it fares well on the performance criteria too, it could lead to potential sales of 5 lakh units a year, translating into about 42,000 units a month.

It said the one-lakh Nano car would give Tata Motors a huge opportunity, as its looks are better than expected, and should address investors concerns regarding potential inferior looks of the low-cost car. Our estimates currently factor in Nano sales of 60,000 units in FY09 and 1,80,000 units in FY10 (translating into 15,000 units a month).

MF Global, in a report, said, We were impressed with the first look of the car and believe that the opportunity is surely out there for such mass models. Tata Motors will initially manufacture 2,50,000 units of Nano in a year. Merrill Lynch expects the company to breakeven by FY10 with such production targets. We have assumed 75,000 in FY09 and 2,00,000 in FY10, with breakeven at volume of 2,25,000.

Earlier, a Crisil research had found that Nano, set to hit the roads in the second half of FY09, will bring down the cost of ownership of an entry level car in India by 30%, making it affordable to families with an income level of Rs 2 lakh.

Nano has 21% more space than the inside of the M800 due to better height, despite being 8% smaller in length. The base variant will be available for an estimated on-road price of Rs 1,20,000. Tata Motors has said, the car, with a 623cc, 33 hp petrol engine with three variants, and a mileage of 20 km per litre, will be Euro 4 compliant.