Tata Motors to roll out the Nano from its Sanand plant next month

Tata Motors expects to commercialise its Sanand plant, that would manufacture Nanos from next month, further boosting its delivery schedule for the low-cost car

India's largest vehicle manufacturer, Tata Motors Ltd, expects to start rolling out its Nano, from its new facility at Sanand in Gujarat from next month, said a company official.

At present, the company manufacturers about 4,000 units of the Nano, the world's lowest-priced car, at its Pantnagar unit at Uttarakhand, on a monthly basis. Tata Motors plans to manufacture around 7,500 units of the Nano on a monthly basis at the Sanand facility.

Once fully functioning, the Sanand plant can manufacture 250,000 Nanos per year, with a likely expansion planned which will raise the number to 500,000 cars per year.

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    Shadi Katyal

    1 decade ago

    Tata shoud look into USA market as it may get a gtood nitch of the market.Due to petrol prices going high , such a car will be good for short distance. It is not worst than YUGO which was a joke and yet sold .,

    Where are the takers for low-cost cars?

    The low-cost car segment may be dying a silent death because of the unavailability of the Nano in the open market and the gradual phasing out of the ubiquitous Maruti 800

    The ever-expanding car market in India is going through some radical changes. The Nano from Tata Motors had the potential to be a game-changer; even global players were eyeing small-car manufacturing. However, with the unavailability of the Nano in the open market and the gradual phasing out of the ubiquitous Maruti 800, Indian customers seem to be looking beyond low-cost cars.

    According to CRISIL Research, the launch of the Nano has further highlighted the capabilities of a low-cost automotive manufacturing ecosystem in India. It will encourage continued emphasis on product developments in the low-cost car category by other manufacturers across the world, with India as a focal point, the ratings agency said.

    However, if you take a look at the sales figures of carmakers and two-wheeler manufacturers, there is an uptrend in both categories. Since the Tata Nano is not available in the open market, there is no information about its monthly sales. Maruti 800 sales, on the other hand, are on a decline. During FY10, Maruti Suzuki India Ltd—a subsidiary of Suzuki Motor Corp—sold just 33,028 units of the car, down 33% from the previous year.

    At the same time, its other vehicles in the ‘C’ category continue to display good results, 30% higher than a year before. So the question arises, where are the middle-class buyers who were looking out for a low-cost car? The answer could lie in the sales figures of either ‘C’ category car sales or higher sales of two-wheelers. During FY10, Hero Honda's sales were up 23.6% to 46,00,130 units while Bajaj Auto’s sales were up 30.8% to 25,11,600 units. This means that the migration of customers to low-cost cars from two-wheelers that was supposed to take place did not materialise.

    The Tata Nano was a huge hit among middle-class customers, with almost 2,03,703 people going in for advance booking. At that time, Tata Motors shortlisted 1,00,000 owners through a computerised random selection process. The company had claimed that the cars are 'price-protected and people will get their dream vehicles at ex-showroom price'.

    "Till end-December (2009), we have delivered about 30,000 units of the Tata Nano. Our delivery schedule is moving as per schedule and all shortlisted customers would get their cars by December 2010,” an official from Tata Motors said.

    The Nano has been in the news lately due to two incidents, in which the car caught fire. An official from Tata Motors told Moneylife that the company has delivered about 30,000 cars in India so far, which have reported no problems. However, the company is investigating the reasons behind these incidents.

    Last month, a brand new Tata Nano caught fire while being driven to a customer’s home from the showroom. On Wednesday, another Tata Nano caught fire in Anand district in Gujarat, en-route to Vadodara.{break}

    The Tata Motors official said, "We are investigating both the incidents. Our investigations in the Mumbai incident are going on and we have yet to pinpoint the exact reason for the fire. The investigation in the Gujarat incident has begun.”

    Although the Nano redefined the term 'small car', the honour for the first small car in India goes to the Maruti 800. Unfortunately, even as the competition for the small-car space is heating up, the iconic Maruti 800 is being phased out from the top 13 cities across the country due to the new emission norms.

    Following the new emission standards, Bharat Stage IV (BS IV), cars such as the Maruti 800, Ford Ikon (1.3 petrol), Chevrolet Tavera (2.5DI), Skoda Fabia (1.2 petrol) and Octavia (1.9TDI) and the Fiat Palio, would no longer be sold in cities like Mumbai, New Delhi, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, Kanpur, Ahmedabad and Surat.

    As more and more players are launching new variants in the small-car segment, the Nano is increasingly being perceived as an entry-level car. Although the Nano can still be called a small car in terms of size and price, the small-car space is becoming crowded with the entry of major carmakers.

    The latest entrants to join the small-car segment are global auto giants Daimler AG and Renault-Nissan. As part of an agreement, these automakers plan to jointly develop the new variant of Renault’s Twingo, Daimler's Smart and a successor to the current two-seater variant of the same model by 2013.

    "Right away, we are strengthening our competitiveness in the small and compact car segment and are reducing our CO2 footprint—both on a long-term basis," said Dr Dieter Zetsche, chairman of the board of management of Daimler AG and head of Mercedes-Benz Cars, in a release.

    Renault-Nissan already has two partners in India for making small cars. In 2008, Bajaj Auto Ltd, India's second largest two-wheeler maker, collaborated with Renault-Nissan to make ultra-low cars (ULCs) with a wholesale price tag of about Rs1 lakh. Bajaj even went ahead and displayed the prototype of the ULC. However, there is no word on the car after that. According to reports, the ULC is expected to hit the roads in 2012.

    Last month, Japanese carmaker Nissan Motor Co Ltd said that it was in talks with Hinduja flagship company Ashok Leyland Ltd for developing a small car for the global market that could be priced around $4,500-$5,000. In India, the car could be positioned between the Tata Nano at the lower end and Maruti Swift at the upper end.

    However, the pricing of all other small cars, at over Rs2 lakh, has made Tata Nano an entry-level car—it is available in Mumbai at an ex-showroom price of between Rs1,34,250 to Rs1,85,375, which still makes it the most affordable car in the world.

    "When we announced the launch of a small car in 2003, our chairman Ratan Tata had used a word 'affordable car' and for the pricing he had used 'between $2000-$3000', roughly translating it to around Rs1 lakh, considering the exchange rate at that time. Later we decided to stick to the Rs1-lakh price tag," said an official from Tata Motors.

    "We are selling the Nano's standard version at about Rs1,12,000 ex-showroom at Pant Nagar, near the facility where we are producing the cars. So in a way, we have kept the Rs1-lakh price tag intact," he added.

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    A correction may be setting in

    As suggested yesterday, the market was under pressure today. It will continue to remain under pressure

    The market was down today on weak cues from Asian bourses. The Sensex fell 255 points (1.4%) to close at 17,714 and the Nifty closed 70 points lower (1.3%) to 5,304.

    The market touched the intra-day high during early morning trade. However, it pared gains soon and was on a downtrend throughout the day. Asian stocks fell for the first time in six days on Thursday after Japanese machinery orders unexpectedly dropped and US consumer credit slumped more than expected.

    Key benchmark indices in China, Hong Kong, Singapore, Taiwan, Indonesia, and Japan fell by 0.28% to 1.92%. South Korea’s Seoul Composite rose 0.42%. US stocks slipped on Wednesday after a senior Federal Reserve member said that policy makers should start raising rates to 1%. The Dow Jones fell 72.47 points (0.86%) to 10,897.52. The Nasdaq declined 5.65 points (0.23%) to 2,431.16 and the S&P 500 fell 6.99 points (0.59%) to 1,182.45. European markets were down on fresh worries about the debt situation in Greece.

    However, the Fed chairman said that the central bank is not thinking of any interest rate tightening now. The European Central Bank said that it will keep the interest rate at 1% to ease the financial crisis in Greece. The World Bank has said that it has lent a record $100 billion as financial support to developing nations over the past 18 months to help them recover from the economic crisis. It had stepped up lending in July 2008 at the request of member countries as demand from developing countries increased in the face of a worsening world recession and sharp drop in global trade.

    Closer home, the food price index accelerated for the second straight session. The index rose 17.7%, which is higher than an annual rise of 16.35% in the previous week. The fuel price index rose by an annual 12.71% which is below the annual rise of 12.75% in the previous week. Foreign institutional investors were net buyers on Tuesday of Rs338 crore. Domestic institutional buyers were net sellers of Rs23 crore. The rupee was on a high on reports of a possible revaluation of the yuan and the buying of dollars by banks ahead of the 3G auction. 

    Bajaj Auto (down 0.1%) will distance itself from the parent brand Bajaj and will make motorbikes and rear-engine three-wheelers. Metal stocks declined as the LMEX—an index of six metals—traded down on the London Metal Exchange. The government plans to sell 20% stake in SAIL (down 7.1%) in two phases. The first sale of 10% is expected to bring in Rs8,000 crore. MphasiS has signed a pact to acquire 100% stake in Fortify Infrastructure Services in an all-cash deal. Bank and financial stocks were down today as investors opted to stay away from these counters ahead of the RBI policy meeting.

    Oil exploration stocks were down as crude prices fell by almost $1 on the New York Mercantile Exchange on Wednesday. Elecon Engineering (up 1.6%) has received two orders aggregating Rs88 crore for the designing, manufacturing, supplying and commissioning of material handling equipment and gear boxes. While it received a Rs47.8-crore order from Jindal Steel & Power, another contract worth Rs40.55 crore was received from L&T. Mahindra & Mahindra (down 1.1%) has raised the price of its utility vehicle due to increase in input costs. The price of its flagship ‘Scorpio’ sport utility vehicle has risen by Rs10,300 to Rs17,500, that of the ‘Bolero’ by Rs26,100 and ‘Xylo’ prices have gone up by between Rs15,300 and Rs15,900.

    Like we said yesterday, the market will continue to remain under pressure. Global cues may weaken over the next week. Indian corporate results for the last fiscal will be keenly watched, and these figures will decide the long-term course of local bourses.

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