The Nano has been in the news for both the right and wrong reasons. It wowed the world because it’s the world’s cheapest car at $2,500. But it also hit domestic headlines, after six cars so far caught fire under mysterious circumstances.
Now, Tata Motors is taking steps to ensure the Nano does not risk catching fire. It has asked Nano owners to bring their cars in to service centers to install some parts to prevent fires. But Tata says this is not a “recall” in the true sense of the word, and is rather a free retrofit option for owners.
By the third week of November, Tata Nano owners will be asked to bring their cars to Tata service centers to fit some safety equipment for free.
The corrective measures include fitting a cover for the catalytic converter, adding a fuse in the electrical system to prevent short circuits and replacing the starter motor (the last step is only for Nano cars that were produced before January 2010).
Tata Motors Group CEO and managing director Carl-Peter Forster said, “The Nano car is a very reliable and safe vehicle. The company has undertaken a second check and found that the vehicle has a safe design. The company has taken up several corrective measures and will now offer a cover tool on the catalytic converter to prevent the car from catching fire. It will also install fuse in electrical components to avoid short circuits.”
Six cases of Nano cars catching fire have been reported since the car’s launch last year and the car maker has promised that the cause of fire is being investigated thoroughly. Tata Motors said that the investigation, by a team of internal and international experts, has concluded that the reasons for the fire incidents in few Nano cars are specific to the cars which had such incidents.
Tata Motors said, “We have noticed instances of additional foreign electrical equipment having been installed or foreign material left on the exhaust system. It is also our belief that as we penetrate deeper, the Nano will be bought increasingly by users in the hinterlands not fully familiar to cars. Besides, our customer satisfaction studies with current Nano owners indicate that about 85 percent are satisfied or very satisfied with the car, because of it being ‘small yet spacious’, its performance, maneuverability, durability, low operating cost and safety.”
Though the Tata Nano is still the cheapest car in India, rising costs of raw material such as steel and rubber have forced carmakers to hike prices of their products. And Tata Motors is no exception. In July 2010, Tata hiked prices of all the three Nano variants—Std, CX and LX—by 3-4 percent (between Rs. 3,700 and Rs.6,894, ex-showroom Delhi).
Early November, Tata motors announced another price hike for the Nano. Prices of the Nano will be Rs. 9,000 more than the current prices depending on the city and model variant. But the company said that the first 1.5 lakh customers who had booked the car in 2009 will not face the hike.
Tata Motors launched the ‘1 lakh car’ or the ‘People’s car’ Nano on March 23, 2009. More than 2 lakh people had expressed interest in buying the Nano but Tata Motors chose only 1.5 lakh of those customers and promised to deliver the car in two phases. So far, more than 70,000 Nano cars are running on Indian roads.
In September, Tata sold 5,520 units of the Nano, up 61 percent over the same period last year. Yet, the Nano failed to attract customers during the festival season and clocked sales of just 3,065 cars despite the company offering the car off the shelf in more than five states in the country.
<!–Ads2–> When asked about the low sales of the car, Forster said availability of finance has posed a “hurdle” in sales. He says that the Nano cars sold in the initial months were mostly bought by people who are not the actual target customers of the car. The intended customers of Nano (two-wheeler owners) are facing problems in getting finance as many of them do not enjoy the same credit worthiness as regular car buyers. Forster is confident that Nano sales will pick up once the finance-related issues are sorted out.
Tata Motors is also planning to launch the “Nano Plus,” an upgraded Nano with a more powerful 1-litre petrol engine and improved interior and safety features.
Over the long term, Tata will also offer LPG and electric variants of the Nano. According to market research firm JD Power Associates, in 2011, the Tata Nano would be the second highest-selling car after the Maruti Suzuki Alto. Tata Motors is also planning to launch the Nano Europa for the export market besides planning for a production plant in Turkey to produce these cars and expand its business.
The Nano, despite teething trouble, continues to wow people, including the most powerful man in the world, Barack Obama. The U.S. president and first lady Michelle Obama were shown a Nano by Ratan Tata when they visited Mumbai last week, and were impressed by the little car.