The wait for the people's car is finally over. One year after Tata Motors unveiled its ambitious Rs 1 lakh car in New Delhi at an auto show, the company on Monday announced the commercial rollout of the Nano.
Those customers who want to have a look at the car before booking it can do so at Tata Motors showrooms and other authorised outlets, where the car will be displayed from April 1, 2009.
Says a proud Ratan Tata, chairman of Tata Sons and Tata Motors: "The Nano wasn't designed as the cheapest car. It was designed as transport at an affordable price. The Nano was born out of an emotional desire to provide transport to families who usually travel in two-wheelers and brave all kinds of weather conditions. The concept began with the question on how we could make the two-wheeler safe."
The Nano will be available to the public in three variants - Standard, CX and LX. All three variants are Bharat Stage II and III compliant. The standard model comes with three colour options, while the CX model comes with heating and air conditioning options, two-tone seats, parcel shelf, booster assisted brakes, fold down rear seat with nap rest. So those going for the base model surely cannot expect even what's given in most other cars, like a parcel shelf.
The Nano LX model is for those who want a low-cost car with bells and whistles because this one comes with all the features of the CX - body-coloured exteriors, fog lamps, electronic trip meter, cup holder, mobile charge point, front power windows and rear spoiler. The company claims that many of the features available in the Nano LX are not available in entry level small cars in the country.
Given that the Nano is a car that can easily be customised to suit any requirement, the company has launched an entire range of 'Nano' accessories ranging from mud flaps, floor mats, audio systems, steering wheel covers, mobile phones, key chains to T-shirts. Given that the wait for the car is likely to be nothing less than a year, customers can entertain themselves with Nano accessories during this wait.
Bookings will be open to consumers from April 9 to April 25. Given the car's low-cost proposition, Tata Motors has adopted a rather novel way to improve marketing and distribution of the car. The group is leveraging all its retail destinations like Westside, Tata Indicom outlets, Croma and the World of Titan showrooms to sell booking forms priced at Rs 300. These forms will be available across 30,000 locations in 1000 cities. The company has entered into an exclusive partnership with the State Bank of India to manage the booking process as it has the maximum footprint in terms of geographical locations. Customers will have the option of paying the entire booking amount or seeking finance from the preferred finance partners of Nano. For those seeking finance, the booking amount is merely Rs. 2,999 upfront.
So, will all the consumers who apply for the Nano become proud owners of the car? Not quite, says the company. Given that the production of the car at its new home in Sanand, Gujarat is unlikely to start before end-2009, currently the company is producing Nano at its Pantnagar facility in northern India, which has a capacity of 1,600 cars per month. At best, the plant cannot manufacture more than 40,000 to 50,000 cars at any given point of time. Thus, customers of Nano will have to wait at least for a year to take delivery of the car.
Given that the entire project has come about so that Tata Motors could offer affordable and yet safe transportation to Indians, the company has decided to stick to its original price of Rs 1 lakh for the first 1,00,000 customers, who will be selected randomly at the end of the booking process. Those worried whether or not Ratan Tata intends to stick to his promise of delivering the car at Rs 1 lakh needn't worry. One of the hype points of this car has been its very affordable pricing, and despite all odds Ratan Tata has stuck to his promise of delivering the people's car at Rs 1 lakh.
Last year, Ratan Tata had said that despite the dramatic rise in input costs, the car would be priced at Rs 1 lakh because a "promise is a promise".
A lot has happened between January 2008 and now, with the Nano being rendered homeless after the Singur fiasco last year. Despite the challenges, Tata Motors has given price protection to the first 1,00,000 customers of the Nano by guaranteeing them the price as quoted last year. During an interaction with the press, Tata said: "Nobody can ever commit to a price in terms of volume but we are doing that for the first 1,00,000 customers."
And those who are not among the lucky 1,00,000 can either hold on to their bookings and earn an interest of 8.5 per cent in the first year and 8.75 per cent in the second year on the booking amount or take the money back at the end of three month process. The company is using an initial public offer route to market its car in the first phase such that it gets to keep the booking amount with itself for three months and by offering competitive rates of interest, the company is also addressing its capital requirements by retaining the booking amount of customers for a longer period.
In time Tata Motors expects to produce at least a million cars per annum, going by the growing demand for automobiles in India. But from next year, Tata Motors will be able to cater to only 2,50,000 cars per annum, which can be scaled to 5,00,000 in due course of time. For now, only the lucky 1,00,000 get to drive Ratan Tata's dream car.
