Tata Nano Debuts among Storm Clouds
By Brendan Moore
The Tata Nano was rolled out to the press yesterday in India by a beaming Ratan Tata, it’s father and CEO of Tata Motors. Production this year is expected to top out at 35,000 units, but that is because of production constraints, not market demand. There is a base model available for $2230 USD, which is widely expected to be quite popular in India, the Nano’s home market.
But all is not well.
Tata is in a tremendous cash squeeze and had it’s first quarterly loss in seven years. They have delayed payments to suppliers and vendors as a result. Their new acquisitions, Land Rover and Jaguar, are struggling along with everyone else in the awful new-car market. There are also doubts about Tata’s ability to keep costs (and therefore retail prices) down on the Nano in the future, as well as concerns about the company’s production capacity.
There are also questions about the market segment the Nano now occupies (by itself). Just how big is the market? What geographic areas comprise the market? Will a “loaded” Tata sell in Western countries? When will competitors show up?
Lastly, environmental groups are up in arms about the potential prospect of millions of inexpensive cars adding to the cumulative total of greenhouse gases being spewed into the environment. Tata, for it’s part, says that meeting the emissions regulations of the EU or the US is not a problem for their Nano.
None of this matters to Tata, at least in front of the press. It was all smiles yesterday, and any potential issues were brushed off in statements to journalists.
Time will tell if the Nano is a success.
But, there is no denying that if the Nano is successful, it will change the entry-level market segment completely. And it will be a tremendous coup for a company that was virtually unknown outside of India just 24 months ago.
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