Booming Indian car market shuns Tata Nano

Booming Indian car market shuns Tata Nano

When it comes to cars, price point isn’t everything, just ask the Tata Nano. Major production delays, land debates and serious questions over occupant safety are slowly killing the Tata Nano and its aspirations in the Indian market. India’s people car has hit hard times despite the nation’s booming car market and a low asking price of just US$2,900.

The overall car market in India is growing at a crazy rate with a 22% year-to-date increase in car sales. With those sort of statistics Tata must have felt it was onto a sure thing and things started out well, with 200,000 advanced orders for the sub-subcompact leading to its 2009 launch. But sales have dropped severely with the Indian carmaker selling just 509 Nano’s in November, down from 9,000 in July.

By comparison India’s bestselling car is the US$6,200 Maruti Suzuki Alto. It offers a larger engine, more spacious interior and a longer history than the Nano, this leads many buyers to go with the Alto even though it costs more than twice as much. With 30,000 units sold in November, the numbers seems to agree. Even the US$7,800 Hyundai i10 is easily outselling the Nano.

So what are the reasons behind the Nano’s demise? Well it turns out that even though the cheapest cars are still where the buying action is in India, but peoples aspirations are getting greater and they want something more substantial. Also at the time of its launch, the Nano was unavailable and dealerships and many customers were put off by not being able to test drive the vehicle before placing an order.

Then there was the forced closure of one of Tata’s factories in West Bengal and the subsequent relocation caused delivery delays and the spontaneous combustion of several Nano’s in the past have affected the Nano’s reputation.

To counter the dropping sales, Tata is allowing buyers to take immediate delivery of their Nano from the showroom. The car’s warranty has also been extended from 18 months to four years, while the company is busy telling Indians all about the Nano’s power and durability to aid public perception.

For now though the Nano is well behind its Japanese and Korean competitors for dominance of the Indian market.

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