Nano unlikely to find its way into the grey market

Written by Yogima Seth | New Delhi | Updated: Apr 15 2009, 05:43am hrs
Nano will hit Indian roads in July and it is estimated that the booking would be thrice or four times the 1,00,000 units that the Tatas have promised to deliver in the first year. However, despite the huge demand-supply gap, analysts feel that there is very little scope for black marketing of the vehicle, courtesy its low price.

"Prospective Nano buyers are very price sensitive and will prefer to wait for a few months instead of paying a huge premium for the vehicle," said Abdul Majeed, analyst and partner, Price Waterhouse.

"Though Nano might have a novelty premium, it will not be more than 20% of the price of the vehicle for the first few thousand cars only; this too will taper off very soon," said an auto analyst. He said that if any black marketing of Nano does happen, it will be at the registration level and the premium would range Rs 10,000-20,000 per car.

Even Tata Motors is ruling out the possibility of black marketing of Nano. "The car will be delivered in the name of the customer, and since prices have already been declared, the vehicle cannot be sold at a premium," said the spokesperson of Tata Motors.

"At the dealer level, a booking cannot be transferred to someone else's name, hence black marketing of the vehicle is not possible," said a Delhi-based dealer of Tata Motors.

"Also, once the car is delivered, it becomes a second hand vehicle and the resale price will be determined by demand," the dealer added.

Incidentally, when Maruti 800, the then cheapest car, was launched in 1983, people had paid double or triple the price of the car (Rs 45,000-55,000) as a premium; the vehicle was way ahead in terms of design and technology than existing cars in the country.