Tata Nano. Great Car or Great PR

There was a time, especially here in the UK when the name of Tata didn’t even show on the radar. Then the Indian company bought out Corus, the Anglo – Dutch steel firm, the largest Indian takeover of a foreign company. If this wasn’t enough this was followed two years later with the acquisition of Jaguar and Land Rover from Ford. The resulting column inches in the press ensured the Tata name would become recognised worldwide.

Fast forward to the 23rd March 2009 and Tata launch the long awaited Nano. The cheapest car in the world priced at a measly 100,000 Rupees (around £1,400). To say this car is basic may be a slight understatement, it is however a car and it gives millions of Indians the opportunity to move up from a scooter into their first proper car. Or so the marketing machine would lead us to believe.

With the PR that has been generated, there is a good chance the Nano may be a victim of its own success. The proposed factory in eastern India that would have built 250,000 Nano’s annually had to be relocated due to violent protests by local farmers delaying the initial launch of the car. As a result annual production will be 60,000 units from its factory in Pantnagar in northern India. Tata have however guaranteed the price for the first 100,000 customers, who will be picked using a lottery type draw. After that it may be a waiting list of around a year, depending on demand.

Assuming the demand is there production will have to be increased markedly for the Nano to break even, with some Indian analysts believing sales figures annually will need to be around the 350,000 number for a period of three years before that magic mark will be realised (others are forecasting six years). With the hype that has been created however, there should be no problem with demand and with the opening of a new factory located in Sanand in Gujarat production could be increased to 250,000 units annually by the end of the year.

So will the Nano have the rest of the car manufacturers quaking in their boots? At this point, probably not. However, there is a huge market out there in the developing world, a market that could see the Nano becoming the biggest small car in the world and if this scenario proves to be true Tata has plans to introduce the Nano in both Europe and the U.S. around 2011. Don’t expect to pick one up for the same price as the Indian model though, as to get the car through safety and emission controls will obviously add a premium. That said it may still be as cheap as £4,000.