The world's most affordable car, the Tata Nano, is likely to drive into the US by 2015. It is all set to take on the Western world with a few variations of the version sold in India. But will the Nano be able to steer away from the bumps in the US road, aka M&M, and not backfire given its current nil US retail network?

Tata Motors, which has been battling a global slowdown in vehicle sales and has reported a four per cent drop in September, including a drop in Jaguar Land Rover sales, has not let the slide in sales temper its ambitions for the Nano's release.

At a recent opening of a Jaguar Land Rover dealership in the US, Ratan Tata, Chairman of Tata Motors, said the car would be ready for the US market in three years and be priced below $10,000.

Abdul Majeed, Partner, National Automotive leader at PricewaterhouseCoopers (PwC), said: “With the acquisition of Jaguar Land Rover, they would be better off in an European country as far as distribution is concerned. Europeans have long been fans of small cars, because smaller tends to mean more fuel efficient.”

Tata Motors also needs to learn from competitor's mistakes. Though Tata has ceded place to rival Mahindra and Mahindra (M&M) in the last fiscal, with the latter selling four times as many SUVs as Tata in the domestic market, the company needs to take heed of M&M's bitter court battle with its US importer and distributor, Global Vehicles USA.

“If the Tata's want to become a global OEM (original equipment manufacturer), a firm presence in the North American market is vital. It is important to do that otherwise it will be extremely difficult to achieve the goal,” said PwC's Majeed.

In discussing the model's prospects to an auto magazine, Ratan Tata pointed to the popularity of small cars like the Mini Cooper and the Smart Fortwo, indirectly implying that the Nano's lower price tag would lure consumers. Nearest competitor in the US is the much larger Nissan Versa, currently the cheapest retailing at around $11,990.

amritanair.ghaswalla@thehindu.co.in

(This article was published on October 19, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.