End of Ratan Tata’s dream car project as Tata Nano might be phased out soon? Or is there an electric hope of revival?

Ratan Tata's dream car Tata Nano is no longer a profitable proposition for Tata Motors. Nano's domestic sales and production is at all-time low and might not receive the required investment to upgrade the Tata Nano to make it BS-VI fuel compliant. However, there is a hope of electric revival of Tata's small car.

By: | Updated: March 21, 2018 1:49 PM
File Photo: Narendra Modi and Ratan Tata during Tata Nano roll out from Sanand plant

With the way things are going for Tata Nano, it looks like Tata Motors is heading towards phasing out the production of its smallest car. The production of the car from Tata Motors’ Sanand plant in the month of October 2017 recorded a total of 74 units which is about down by about 90 percent when compared to the same month last year. In the ongoing financial year 2017-18 (April – October 2017) the company has manufactured 1,299 units as against 5,380 units in April – October 2016 period. The numbers are at all time low and Ratan Tata’s dream project of making the most affordable car for Indian families too might fade away. Domestic sales of Tata Nano this financial year stands at 1,493 units which is down by about 71 percent.

Tata Motors is currently working on business strategy that revolves around optimising loses and picking up volumes to increase profitability. N Chandrasekran, Chairman, Tata Sons had earlier accepted that not just Tata Nano but every passenger vehicle is losing money. The company has adopted a strategy to cut down the number of platforms from current six to two advance modular platforms. Tata Nano was a great idea but an ambitious project, soon after its unveil in 2008, Tata Nano made it headlines and was the talk of the nation for a long time but the tag line of a cheap car spoiled it all for the company and for car itself. The company also reintroduced the Tata Nano GenX version in 2015 with AMT gearbox to appeal to more younger buyers but wasn't enough to get sales going.

File photo: Ratan Tata at the launch of Tata Nano in 2009

A report of Business Standard says that Tata Motors dealers are in most parts of the country have stopped placing order for Tata Nano and are also offering discounts to clear out its existing stocks. Tata Nano’s components suppliers have not been asked to stop production for any of the small cars’ components. However, the suppliers are not blocking any production capacity for Tata Nano, the required part is made as per order claims the Business Standard Report. With BSVI norms kicking in 2020 we do not expect Tata Motors to make any new investment on its existing Nano.  Tata Motors says that the company is still manufacturing Nano catering to customer demands in key markets.

Electric Tata Nano Image Credit: AUTOCAR

However, there might be an electric version of Tata Nano that will be built and sold by Jayem Auto a Tata Motors backed company and reports suggest that the car might be called Jayem Neo. Tata Motors will supply Nano body shells without the engine and transmission to Jayem Automotives, which will manufacture and market the EV. Going forward we will still see the electric version of the car but will not be branded under Tata Motors or carry the name of Nano and hence we expect Nano to be phased out soon as it is no longer a profitable proposition for the company.

Tata Motors is also currently busy developing the electric Tata Tigor for the EESL tender and we expect to see the production version of electric Tata Tigor in December 2017.  Tata Tigor will be powered by a 85 kW electric motor and the car will also weight almost 200 kgs less than the regular Tata Tigor variants. Tata Motors is certain about getting into electric vehicle business but the future of Tata Nano is clearly uncertain and we might see the end of it soon.

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