The Tata Nano could finally hit the taxi circuit in India, and perhaps do a Bajaj RE60 for Tata Motors. The word is that Tata Motors is in talks with Indian cab aggregating companies such as TaxiForSure and Ola, for inducting the Nano into taxi fleets. The Nano, with its comfortable seating capacity for 4 adults is likely to be an autorickshaw replacement rather than an option that regular cab users would consider owing to the minimal luggage space that the Tata hatchback is endowed with, in its current guise.
Notably, cab fares in leading urban centers of India – on the back of aggressive pricing by cab aggregators such as TaxiForSure and Ola- have fallen to levels that are tantalizingly close to autorickshaw fares. For instance, TaxiForSure charges 49 rupees for the first 4 kilometers as the base fare on its cabs, with each subsequent kilometer being charged at 14 rupees. Inducting the Nano into the fleets of TaxiForSure and Ola will allow these cab aggregators to maintain aggressive pricing schemes, taking autorickshaws head on.
A popular joke around the Nano, during the first couple of years after its launch, was that the hatchback was more of an autorickshaw on four wheels than a proper budget car. While the Nano’s exhaust note isn’t too dissimilar from that of a Bajaj RE four stroke autorickshaw, Tata Motors will not doing itself any favours by inducting the world’s least priced car into taxi fleets, at a time when the Nano’s image is still that of a barebones four wheeled mobility option that misses a sense of aspiration.
This move from Tata Motors is a confusing one. On one hand, the automaker is trying hard to push the Nano upmarket, with feature rich variants such as the Nano Twist and the CNG-Petrol dual fuel variant. Working towards this goal, lower variants of the Nano, such as the Base, CX and LX variants are said to be on the pipeline towards discontinuation. On the other hand, the automaker seems intent on deploying the Nano’s lower variants into the cab circuit, a move that could further dent the image of the hatchback, which has never moved away from its “cheap” image.
Tata Motors’ latest move could have three reasons,
- The Indian passenger car and commercial vehicle maker has just put its Magic Iris based quadricycle project on hold and the Nano entering taxi fleets could fill in the quadricycle requirement nicely. The Nano – endorsed as a car – will be more competitive than a Quadricycle, which comes with a 70 Kph speed limit and is precluded from highway operation.
- The automaker has large stocks of unsold Nano inventory, especially of the lower variants, at its Sanand stockyard. Selling these cars at large discounts to cab aggregators such as Ola and TaxiForSure will help clear inventory, allowing Tata Motors to focus on the upgraded Nano, which is due for a 2015 launch.
- Tata Motors could have an Indica-Vista concept in place for the lower variants of the Nano and the upgraded models of the car. Like the Indica was demoted to being a cab-only model following the advent of the Vista, the lower variants of the Nano could go the same way.
While history seems to be repeating itself, it is worth pondering whether this strategy will work for Tata Motors. In the past, it clearly hasn’t, what with the Vista also ending up as a cab and currently about to be replaced by the Bolt B+ segment hatchback.