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Old 26th March 2009, 07:56   #16
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Nano is not a very expensive product in the market. Its such that most of the Indians can buy it. So in the first place people will prefer to go for a new one rather than old one.
So resale value within one years will be around 50% of the original cost. If a Rs. 1.5 lakh OTR car loses 20% within one year to come around rs 1.2 lakh, then the customer who is upto buying a second hand nano will think " For the same cost I will get a new one ".

Just a thought, but this IMO will happen. The car being so common and cheaply available, people will prefer to go for a new car rather than old. This will make the car lose its resale value approx 50% in less than one year.
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Old 26th March 2009, 08:03   #17
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with the amount of bookings expected,I doubt if tata can deliver these many cars in 2 years even.and yes lucky people who get the delivery,may try to sell them at a premuim
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Old 26th March 2009, 10:05   #18
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Lets Assume the Car's base price is 1l. Now if the car depreciates 20% in the first year, its price will be 80K in the next. We Indians to a large extent do not like going in for 2nd Hand cars if we can get a brand new car for a small premium. Its like the same stigma we have against Hatchbacks. It's a lot more 'prestigious' to buy a brand new car. Besides even most of the so called middle class families, the main target group for the Nano have egos the size of an elephant's. Come on, this is India. Even a rickshaw driver has crazy attitude. People will prefer to put in the 20k extra and go in for the brand new version. Remember, its the same car we are talking about, not a different make or model. So i guess the depreciation will be around 40% to 50% in the first year itself. Besides it wont hit the resales of higher end cars the sedans etc. When a person buy them he does not buy them for buying a car. He buys it for getting an amazing bang for his buck. Nano is more like for people who wish to upgrade to a Car. This probably will hit the resale of the Sub- 4L hatchbacks. I think thats about it.
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Old 26th March 2009, 10:40   #19
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Quote:
Originally Posted by redeff View Post
So i guess the depreciation will be around 40% to 50% in the first year itself.
Calculating 40-50% depreciation in the first year is on the higher side IMO.
It would depend on the number of bookings Tata is able to garner when bookings open next month and then on the number of cars it is actually able to put on the road.
Say it gets 10 lakhs bookings (the most common number that I am got to hear), I think Tata would have its hands full atleast for the next 2 years. With people unable to buy a brand new car, they would obviously look to the second hand car market for a pair of wheels. That in turn would keep second hand prices quite firm.
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Old 26th March 2009, 11:17   #20
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Quote:
Originally Posted by aaggoswami View Post
Nano is not a very expensive product in the market. Its such that most of the Indians can buy it. So in the first place people will prefer to go for a new one rather than old one.
So resale value within one years will be around 50% of the original cost. If a Rs. 1.5 lakh OTR car loses 20% within one year to come around rs 1.2 lakh, then the customer who is upto buying a second hand nano will think " For the same cost I will get a new one ".

Just a thought, but this IMO will happen. The car being so common and cheaply available, people will prefer to go for a new car rather than old. This will make the car lose its resale value approx 50% in less than one year.
The issue is that the Nano will not easily available for at least 2 years. So if people want a new car they will have to wait in line!

IMHO the Nano will lose less than 10% in year 1 for the base variant and less than 20% for the other variants.

I remember when Chrysler has launched the PT Cruiser in the US there was a long waiting period. You could buy the car and drive it around 10K- 15K miles for a year and sell it pretty close to the original retail price.
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