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Old 2nd November 2010, 19:06   #1
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Default Can the Nano sustain itself in the long-run?

I know this may sound like a silly question but I have some doubts about its long term viability.

1) The Nano production line is behind schedule due to the Singur Fiasco. It will take some time for Tata to catch up. Not to mention that waiting periods are irritating potential Nano buyers.

2)News reports of a few Nano's catching fire can't help sales.

3) The automobile in India is a status symbol if nothing else. If you were buying your first car, would you want to buy one which is known as the cheapest car available? I mean, if you buy a Nano, that means that you cant afford anything else. Isnt that counter-productive?

4) Finance schemes are being used more often. It would seem more logical to spend on a "bigger" car (A-star,Alto, Indica etc) which is more acceptable on Indian roads.

5) I dont see Tata pushing the Nano into the fleet/taxi business. I feel that special schemes targeting taxi drivers and auto-rickshaw drivers would really contribute to the bottom line.

6) I am still skeptical that families who own only one two-wheeler can genuinely afford or maintain a Nano.
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Old 2nd November 2010, 19:23   #2
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I have read a story about NANO
Via: Economic Times

Top guns rush to grab driver's seat in Nano


Quote:
The people’s car is a hit with the corporate swish set. Among the 67,000 Tata Nano owners are corporate chieftains who otherwise ride on cars whose four wheels alone could buy the people’s car. At the Lutyens’ Delhi residence of Anand Burman , the chairman of Dabur India, a champagne-coloured Nano rubs bumpers with a Mercedes S-Class, a Bentley and a Range Rover.

When he got his Nano two months ago, a Dabur employee recalls, a gushing Mr Burman dragged his colleagues outside for a look-see. “It’s cute and convenient,” he says. It’s a reaction the Rs 1-lakh car has been evoking among people who otherwise, in their choice of cars, don’t seem to give a fig about price, fuel economy and the like.

Captain Krishna Nair, chairman of Hotel Leela Ventures, is a proud owner of a Nano. As are K Mahesh, CMD of Sundaram Brake Lining; Vinoo Mammen, CMD of MRF Tyres; and VC Burman, former Dabur India chairman.

While they marvel at the Nano’s affordable positioning, it was the intangible that made them travel the distance from admirers to owners.

“It’s the pride of India,” says VC Burman, high commissioner of the Nicaraguan embassy. Ratan Tata promised India and the world a car for Rs 1 lakh — about half the price of an entry-level car — and delivered. While VC Burman uses the Nano to do personal work in the capital, he gets a greater thrill knowing visiting foreign delegates at the embassy will see this made-in-India, game-changing car.

Yet, there’s a dash of irony in the neo-rich, who mostly move in vehicles that are anything but an advertisement for value, plumping for the Nano. Never previously has a small car been embraced in high society like this. Santosh Desai, adman and social commentator, puts it down to branding. “The Nano allows its users to be what other small cars don’t,” he says. “It’s Indian and is a mark of innovation. And the Tata tag gives it respectability.”

Captain Nair liked the courage of Ratan Tata’s endeavour so much that he ordered a Nano when it first opened for bookings in March 2009. And when he got it, the 89-year-old hotelier wrote a complimentary letter to Mr Tata. Captain Nair and his 78-year-old wife, Leela, use the Nano to drive around the surroundings of the Mumbai airport, where his company has done extensive landscaping work. “We have almost stopped using the BMW and, sometimes, even the Rolls Royce for our long evening drive,” he says. “Leela loves it.”

While Captain Nair relates to the Nano on a nationalistic plane, Mr Mammen is a financial stakeholder in the car. His company, MRF, makes the different-sized tyres in the Nano work. “We were involved with the project from the beginning,” says Mr Mammen. “So, there was a natural curiosity.” Mr Mammen, who has a chauffeur, has since dropped his E-Class Mercedes for the Nano. “It’s light and flexible. And it’s easy to get in and get out.”

Mr Mahesh of Sundaram Brake Lining is also angling to become a stakeholder in the Nano. The company has been cleared by Tata Motors to supply auto parts for the car. Mr Mahesh, who drives himself, likes the car’s drive quality. “It has good headroom for a six-footer like me and amazing sedan-like comfort,” he says.

Nano’s emergence in India as a preference or statement — of whatever — has precedents elsewhere. For instance, in Hollywood, the Toyota Prius , a hybrid sedan, is a big hit. Its owner-fans include Cameron Diaz , Leonardo DiCaprio , David Duchovny and Rob Reiner. George Clooney and Dustin Hoffman make their statement with another hybrid, the Tesla Roadster. In India, for now, it’s the Nano that is doing the rounds.
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Old 2nd November 2010, 19:51   #3
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Quote:
Originally Posted by crazycardude198 View Post
I mean, if you buy a Nano, that means that you cant afford anything else. Isnt that counter-productive?

You can't afford anything except a Nano. So what? At least you can afford this! So many people who couldn't dream of a car can now at least think of a car. I don't think this would be counter-productive. You may argue that there is always the used car market if can't buy a new one. But so many wouldn't want to buy a used,at the same time can't afford a new one. I think the Nano is an answer to that category.
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Old 2nd November 2010, 20:07   #4
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The Nano has already made it as far as an affordable car is concerned. Ask anyone who plans to buy a Maruti 800. Or retire into a small runabout for the city after a lifetime in chauffeur driven Ambassadors. The market segment is huge, and there is potential in terms of a Nano rickshaw, electric Nano, LPG Nano, Turbocharged Nano! and more to come.

Tatas are evidently working hard on resolving the niggling issues with their li'l magnum opus. So far they have done better than most of us thought they would when the Nano project was announced.

& lastly, though I do not own a Nano (yet), I inevitably smile when one passes by dressed in Sunshine Yellow.
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Old 2nd November 2010, 20:33   #5
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Quote:
Originally Posted by crazycardude198 View Post
I know this may sound like a silly question but I have some doubts about its long term viability.

1) The Nano production line is behind schedule due to the Singur Fiasco. It will take some time for Tata to catch up. Not to mention that waiting periods are irritating potential Nano buyers.

2)News reports of a few Nano's catching fire can't help sales.

3) The automobile in India is a status symbol if nothing else. If you were buying your first car, would you want to buy one which is known as the cheapest car available? I mean, if you buy a Nano, that means that you cant afford anything else. Isnt that counter-productive?

4) Finance schemes are being used more often. It would seem more logical to spend on a "bigger" car (A-star,Alto, Indica etc) which is more acceptable on Indian roads.

5) I dont see Tata pushing the Nano into the fleet/taxi business. I feel that special schemes targeting taxi drivers and auto-rickshaw drivers would really contribute to the bottom line.

6) I am still skeptical that families who own only one two-wheeler can genuinely afford or maintain a Nano.

I don't think 1) is going to drastically affect potential Nano customers; although 2) surely will..

Talking about cars and status symbol, the main market that the Nano targets is families which do not have enough resources to buy and maintain an entry-level car but cannot suffice with a 2-wheeler (the eternal hum-do-hamare-do family).. So, for such a market, status symbol etc. is of no significance.

More importantly (as pointed out by wildon), even people who own much more fancier and luxury cars have a Nano in their garage.

So, I think the Nano will sustain well and find a market for itself.
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Old 2nd November 2010, 20:48   #6
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Quote:
Originally Posted by crazycardude198 View Post
1) The Nano production line is behind schedule due to the Singur Fiasco. It will take some time for Tata to catch up. Not to mention that waiting periods are irritating potential Nano buyers.
It is not the case as of now. Nano is available off the shelf. Our very own Team-BHPian LukeSkyWalker bought Nano in just 3 days one week back. 1st day Test drive/Decision making 2nd day payment 3rd day delivery. It is available with all Tata Dealers at least in Bangalore.

He negotiated with 2 dealers and both of them having ample choice of colors and variants and ready to deliver Nanos.

Last edited by anujmishra : 2nd November 2010 at 20:50.
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Old 2nd November 2010, 20:48   #7
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Nano'ed again. I am discussing Nano almost in all parallel threads now, grt. That shows how concerned we are for the cute innovation that Nano is.
Indeed Nano was made for the "Hum do Humare do" family and indeed suffices for their need, but another target segment is a affluent who want to own a nano because it is "The Nano". Something in the lines of VW Beetle or Fiat 500 (not in the luxury segment though).And somehow its also working.

October sales of Nano are 3025. Now thats surely not a figure we all wanted to see considering 32K Alto's in the same month. Alto till today outsells by a tenth margin. Sanand production is in full swing, so we expected the booking backlog to be over soon. Then we are left with only off the shelf sales. Thats when the real picture shall come up I feel.

Its indeed a good offering, may be its a tough road ahead for it still. Fingers crossed, I wish it good luck.

As far as owning and affording Nano is concerned, does anyone remember the days of Hero-Honda selling bikes with Mileage +70. Who would be buying bikes with mileage 35 kmpl, was the thought then. I don't have the numbers but Yamaha (all its 150cc offerings have a horrible mileage) sells like hot cake now at a much higher cost. Nano can do the same to the Lower Middle class owning only bikes. 20 Kmpl mileage, a full car, safety better than a two wheeler and cost only 4 times a normal bike (may be). thats not a bad proposition I feel.
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Old 2nd November 2010, 21:05   #8
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Also, 2 factors that have possibly affected Nano's sales figures are (been pointed in a parallel thread too) :

- the time travelling from Singur to Sanand resulting in huge backlog which frustrated many people who eventually cancelled orders
- financing options..

I think once that is sorted out, Nano will pick up.

@justwheels : the Nano is roughly just TWICE an average bike (!)

The tier-2 cities, towns may start having Nanos since it would be financially viable there. And given the traffic and parking woes in almost all major cities in India now, people want a car that'll fit in anywhere.

Guess it all depends on how well Tata can market it further.
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Old 2nd November 2010, 21:37   #9
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Unhappy Latest Oct Sales Figures ?

Having seen Oct sales figures for Nano (IIRC ~ 3200 odd), it's concerning number. Considering, they sold about 5000 odd in September. And that too after it's available off-the shelf.

I don't know what are the "real" reasons. But, is it that the target customer for Nano does not find "value" in it? Or something else? Having weather all sorts of obstacles, Nano made it to roads and proved that it's road worthy. Won hearts with all and sundry. But, is it failing to win the customers who would bet their cash on?

I sincerely hope and wish that Nano to be a success story. I feel disappointed to the least! :-(
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Old 2nd November 2010, 21:41   #10
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I have questions about the affordability factor. If someone really wants to buy a car, they can buy an old Maruti 800 for 30-40K. Considering that entry level segment buyers may not know driving very well, that's a better option so that you don't scratch your brand new car on the 1st day on road.

And still there is a big difference between 25kmpl and 75 kmpl (Hero honda). So, obviously it's not for daily commuting. Given that, does it make sense to invest your hard earned 1 lakh on a car which is still considered cheap? I remember when we had our first car (petrol Amby), we used to calculate the running expense everytime we take the car out for a trip to the town.

However, Nano as a second car really really make sense. All the Nanos I've seen in Bangalore till now are driven by IT employees. Now if Tata spices it up a bit and bring an auto box or electric engine, nothing beats it as a city car. But then, that defeats the whole nano mission.
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Old 2nd November 2010, 22:50   #11
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Quote:
Originally Posted by tachobells View Post
I have questions about the affordability factor. If someone really wants to buy a car, they can buy an old Maruti 800 for 30-40K. Considering that entry level segment buyers may not know driving very well, that's a better option so that you don't scratch your brand new car on the 1st day on road.

And still there is a big difference between 25kmpl and 75 kmpl (Hero honda). So, obviously it's not for daily commuting. Given that, does it make sense to invest your hard earned 1 lakh on a car which is still considered cheap? I remember when we had our first car (petrol Amby), we used to calculate the running expense everytime we take the car out for a trip to the town.

However, Nano as a second car really really make sense. All the Nanos I've seen in Bangalore till now are driven by IT employees. Now if Tata spices it up a bit and bring an auto box or electric engine, nothing beats it as a city car. But then, that defeats the whole nano mission.
My previous ownerships of cars are in two digits. Eight months back, I switched over to Nano LX. So far covered more than 10,000 kms. I do admit there were small small problems for which I had to go to the service centre too often. But, Nano is a car which you need to drive for atleast 20-25 kms to believe it. I like it and I love it. I have switched to Nano not because I cannot afford to buy any other car. Now, there are plenty of loan schemes..
But, Nano is a new concept. Perfect for an office going person who do not need the luggage area behind the rear seat. The only two serious omissions I found are the glove box and Left side mirror.
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Old 3rd November 2010, 12:03   #12
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Biggest drawback of Nano is its engine note. It does not sound like a car. Not many people are bothered about the fire issues.
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Old 3rd November 2010, 12:23   #13
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Tata has not yet put in all the efforts in marketing the Nano. I think they have had their hands too full with too many things...

but I read somewhere that they are planning to open hundreds of booking outlets for the Nano in Tier2,3 towns which is where they expect bulk of the future sales to come from and not from cities where its just a fad to own a Nano..

Distribution is the key, and once TATA has a network of "dealerships" for the Nano, it will revolutionise the Indian car market..and you can trust Tata to do some smart stuff at that
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Old 3rd November 2010, 12:23   #14
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It all depends on how Nano will manage long term reliability issues. On the Nano thread here, we see so many problems which makes you wonder if the only requirement was to build a cheaper car.
Its all about VFM factor. People wont mind paying extra for Alto or other car even if its costlier but has real low maintenance.
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Old 3rd November 2010, 12:31   #15
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I am not a big fan of Nano.

1. For a slight increase in EMIs , you get much better and safer Alto
2. Fire incidents and TATA niggles
3. TATA not a pioneer in petrol engines. Japanease and Korean rule the roost.
4. Enigne sounds like an Autorikshaw
5. Lack of boot space
6. Recent price hikes
7. Image - people will see you as someone desparetly trying to upgrade to a 4 wheeler from a 2 wheeler.
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