The Hindu Business Line : From Singur to Sanand, an arduous drive

Mumbai, March 22 It has taken the Tata Nano a good 15 months between the time it was first showcased at the Delhi Auto Expo in mid-January last year and its official launch on Monday.

The people’s car has had a tumultuous journey since the time Mr Ratan Tata first displayed it and said those four memorable words on its Rs 1-lakh price tag, “A promise is a promise.” They had the crowd on its feet applauding the Tata Group Chairman who was determined to prove sceptics wrong.

After the glory came the hard reality. The Nano was scheduled to roll out of the Singur plant in West Bengal towards end-October 2008. All hell broke loose when Trinamool Congress chief, Ms Mamata Banerjee, protested on behalf of the farmers who, she claimed, had forfeited their land and their livelihoods in the process. Even then, Mr Tata would not give up though valuable time was being lost on the rollout. Finally, he called it quits and decided to relocate the project to Sanand in Gujarat. “Work is happening at a brisk pace and the first car could roll from the production lines by January 2010,” sources say.

Production plan suffers

The fact remains, though, that the Nano’s original production schedules have gone completely awry following the impasse in West Bengal. Ancillary suppliers were told that 96,000 units were planned for 2008-09 but once the Singur protests intensified, this was halved to 50,000 cars.

When Mr Tata announced the pullout, vendors were optimistic that the company would still manufacture 15,000 units between January and March 2009 from its Pantnagar unit which was part of Plan B. It is now clear that no customer will get a Nano this fiscal except for the select few who may get one at the launch ceremony on Monday.

“It has been an unfortunate setback for Tata Motors but we are sure that it will put the car on the fast track once the Sanand plant is commissioned. During 2010-11, the company has the potential to produce 150,000 cars, going up to over 250,000 units and 500,000 units eventually,” a top ancillary supplier for the Nano said.

However, meeting demand in 2009-10 will be difficult as the Pantnagar facility can at best roll out 5,000 cars a month. In fact, top sources say that the production schedule for April is only 1,500 cars, which means that Tata Motors will be hard-pressed to meet the expected 250,000 plus bookings. Customers may have to wait at least eight months before they get their car.The Nano was first planned as a gearless car which would have worked wonders with the working woman using a Kinetic or Honda scooter. This would have been a natural upgrade but since this objective did not quite materialise, the car ended up with a manual transmission.

Two-wheeler face-off

Nano is small but can still edge the two-wheeler off the road. It will be interesting to see if the two-wheeler segment will be face pressure from the Nano. A section of industry observers feels that this is inevitable as Nano offers the most comfortable price point between a motorcycle costing Rs 45,000 and the cheapest car, now the Maruti 800, at nearly Rs 2.2 lakh.

Others do not think this will happen simply because of the mileage factor. “An entry-level motorcycle gives you over 55 km to a litre while the Nano will give half this. How would you expect customers to compromise on operating costs,” they ask. The answer will gradually unfold in the coming months once the Sanand plant steps on volumes.

The 624cc petrol version of the car will debut in three versions. The basic option, without air-conditioning, will carry the magical Rs 1-lakh (ex-factory and without transport cost) price tag. Sources say, though, that it will account for only 20 per cent of sales with the mid- and top-end versions taking up the lion’s share. “Most buyers would prefer a car with air-conditioning even if it costs a little more. And paying even Rs 1.6 lakh (on-road) for the luxury Nano is a bargain for a four-wheeler,” sources say.

Tata Motors is also believed to be working on a 684cc diesel version, which will roll out of the Sanand plant in 2010-11. It could end up doing very well, on the lines of the Indica where the diesel option takes up over 90 per cent of production.

“However, the Nano is much smaller and more of an intra-city car quite unlike the Indica which can do inter-city drives quite comfortably with its bigger engine. To that extent, it remains to be seen if the diesel version will score solely on the fuel price advantage,” sources say.

Tata Motors recently showcased the Nano Europa at the Geneva International Motor Show, clearly driving home the message that the people’s car will look for geographies beyond India. Speculation is rife that a similar initiative is planned for Thailand. A three-cylinder version of the Nano with a host of safety features could make its way to the country in the next two-three years.

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Tatas pick Gujarat for Nano

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