Tata plans car to fill gap between Nano & Indica

Written by Ronojoy Banerjee | Ronojoy Banerjee | Shweta Bhanot | New Delhi | Updated: Jan 7 2012, 06:54am hrs
Sensing a significant market in the R2-3 lakh range, the countrys largest automaker Tata Motors has initiated a study to gauge the viability of introducing a small car within this price point. The companys managing director (India operations) PM Telang told FE on the sidelines of the Auto Expo that it was studying the gap closely.

This is the first time a senior Tata Motors official has come on record with its plans to plug the gap between the Nano (starting price range R1.3 lakh) and Indica (R3 lakh onwards), though markets have been abuzz with talks of such a vehicle for long.

Though Telang did not share the progress or the tentative deadline for the launch, top industry sources said that the car under development has been codenamed Amalagam. An official of a Gurgaon-based component maker closely associated with the company said, Tata Motors has expressed interest in introducing a car that would fill the gap. However, there is not much progress happening on that front right now. The official did not want to be identified.

A Pune-based vendor said that the company would unveil the Amalagam as a futuristic product.

The Gurgaon vendor said that though the company has been in discussions with component makers for over a year, its first task would be to stabilise Nano sales at around 7,000-plus units per month. In fact, on Thursday Tata Group chairman Ratan Tata in an interaction with editors had said that the Nano would see a turnaround in sales.

At present, close to 40% of the passenger car market in the country is in the sub-R4 lakh category with market leaders Maruti Suzuki dominating the segment with its Maruti 800, Alto and WagonR models. Hyundai Motor India also has two models in this price point, the Santro and Eon. This is a big segment. Just because one product has not matched company expectations does not mean that they should not look at other products in a similarly price-competitive segment,said Abdul Majeed, partner at PricewaterhouseCoopers.

Telang, who is retiring on June 21 from Tata Motors when he reaches 65 years of age, shared with FE the company's plans to find a suitable successor after him. He said Tata Motors was actively exploring a suitable candidate to man the post of the managing director once he demits office. This (succession planning in Tata Motors) gets continuously reviewed and it is a very sensitive subject because if you select one, you are going to demoralise many others, said a candid Telang. He added that at present Tata Motors had quite a few competing candidates at various levels. The development of the potential of the people has to be a long-term process. Everyone is being encouraged to continuously think going forward as to how they can occupy higher positions in the company, he said.

Later, addressing the media as part of the company's senior management round table, Telang said that Tata Motors would introduce a CNG-powered Nano for the domestic market, which he hoped would be launched by the end of the year. He also said that the company is also mulling exporting the Nano to emerging markets like Bangladesh, Thailand, Myanmar and Indonesia.