Tata Motors’ Sanand factory at Gujarat is seeing a major production re-alignment. Multiple variants of the only car manufactured at Sanand, the Nano hatchback, have been discontinued. Reportedly, Tata Motors has stopped building the Base, CX and LX variants of the Nano, which in other words is 3 out of 5 variants of the Nano in production. The recently launched Nano Twist variant is being produced at Sanand and so is the CNG powered version. Both the Twist and the Nano CNG are less than a year old in the market, with the Twist bowing in earlier this year.
The move from Tata Motors to discontinue 3 of the 5 Nano variants could have two major reasons.
1. The poor sales of the hatchback in India.
2. Tata Motors’ constant upmarket push given to the Nano, by adding new features and revising the price upwards.
For instance, the Nano’s sales for the first five months of the year have been less than 10,000 units, making for a monthly average of barely 2,000 units. While the months of February and March saw demand perk up due to the addition of the Nano Twist to the small car’s line up, the months of April and May saw Nano sales falling back to a paltry 1,000 odd units each month. Obviously, the spurt in sales due to the launch of the Nano Twist, has subsided and the hatchback finds itself back in the doldrums belt.
Continuing to produce all variants of the Nano will only serve to increase inventory levels, which is again an expensive and a loss making proposition for Tata Motors. Interestingly, the Sanand factory has capacity to churn out 240,000 units of the Nano each year, or about 20,000 units of the “world’s least priced car” each month. With production barely touching the 10 % mark of the total installed capacity, the Nano is proving to be a money pit for Tata Motors, something that the automaker can ill afford especially at a time when its other offerings in India aren’t doing very well either.
So, what does the future hold for the Nano and Tata Motors’ vendors who have set shop around the automaker’s Sanand factory?
As mentioned earlier in this report, the Nano will be marketed as a “smart city car”, with an upmarket push in terms of the features offered and also in terms of the pricing.
The Nano might no longer be the world’s least priced car given the slew of exciting, new features that Tata Motors is planning to add to the hatchback.
Two new Nano variants are in the pipeline. One variant will feature an open-able hatch lid, a larger fuel tank, upmarket interiors that will see their umpteenth revision and a minor cosmetic facelift on the outside. An electric power steering will be standard on this variant, which will look similar to the Nano Twist Active concept that Tata Motors displayed at the 2014 Indian Auto Expo. The facelifted Nano is expected during this year’s festive season that will kick in soon.
The other variant will add an automated manual transmission to the Nano’s feature list, making the car the least priced automatic car in India, and perhaps the world. A third Nano variant, with a larger 800 cc petrol engine with a triple cylinder layout, is in the works. However, the launch timeframe of the larger engined Nano remains unknown at this point in time.
Coming to the fate of the large crop of vendors who have set shop near Tata Motors’ Sanand factory, they are likely to be rehabilitated with new projects such as the Kite hatchback and compact sedan, both of which are expected to roll out from Sanand. For now though, the CX variant of the Nano is available for a chunky 45,000 rupee discount while the Standard or Base variant of the Nano, the model that fulfilled Mr. Ratan Tata’s promise of the “1 lakh rupee car” for India has been discontinued for good. That, says it all.