Tata Nano Sales Rose by 1,136% in December

In an effort to boost sales of its US$2,900 Nano micro car, India's Tata extended the warranty and offered easier financing in December, while it also launched a new advertising campaign that included a TV spot.

It turns out that this was a smart move, as sales of the Nano spiked reaching 5,784 units, which represents a 1,136% increase over the 509 units the company shifted a month earlier. This is still below the 9,000 monthly sales record achieved in July, but it seems that the Nano is back with a vengeance for 2011.

The warranty has been extended to four years or 60,000 km (37,282 miles) and clients can opt for a US$2 monthly maintenance option, which, coupled with the opening of new sales points and the upcoming nationwide distribution plan, should keep the momentum going.

“Tata Motors is now focusing on the Nano because its reputation is riding on it”, said Umesh Karne, a Mumbai-based analyst with BRICS Securities Ltd., who has a “buy” rating on the stock. “Measures such as easy financing and the maintenance offer have reassured customers”.

Last but not least, the Indian maker also promised to retrofit all Nanos with revamped exhaust and electrical systems in order to prevent more cars bursting into flames.

By Csaba Daradics

Source: Bloomberg

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VIDEO: Tata Tries to Boost Nano Sales with New Ad

As previously reported, Tata Nano sales in India have dropped significantly in the past few month, with just 509 customers opting for the US $2,900 micro car, down from 9,000 in July. It seems that Indian buyers have higher aspirations and are moving away from the Nano, as the nation’s market is booming. Reliability issues and a few spontaneously combusting units didn’t help sales either.

To mend the situation, the automaker has extended the car’s warranty and launched a new TV ad, depicting the Nano as the most lovable thing of Earth. Hit the jump to watch the commercial.

By Csaba Daradics

Source: Youtube , Via: Indian Autos Blog

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India's Car Market Booming yet Customers Show Little Love for Tata Nano

Sometimes being cheap and cheerful just isn’t enough. Production delays, land debates and questions over occupant safety are killing the Tata Nano faster than an unexplained engine fire. India’s people car is struggling in spite of the nation’s booming car market and a low asking price of just US$2,900, half of what its nearest rival costs.

With economic growth at a staggering 9% per annum and a 22% year-to-date increase in car sales, Tata must have felt it was onto a sure thing. Things started out good, with 200,000 advanced orders for the sub-subcompact before its 2009 launch.

However, sales have been flagging these past four months with the Indian carmaker selling just 509 Nano’s in November, down from 9,000 in July.

India’s bestselling car is the US$6,200 Maruti Suzuki Alto. With a bigger engine, more spacious interior and longer track record than the Nano, many buyers prefer the Alto in spite the fact it costs more than twice as much. With 30,000 units sold in November, the numbers seems to agree. Even the US$7,800 Hyundai i10 is outselling Tata’s golden child.

Hormazd Sorabjee, editor of Autocar India, explains why the Nano is falling behind its more pricey competitors:

"The bottom of the pyramid continues to be where the action is. But the aspirations of people are moving up. People want to jump into something more substantial.”

At the time of its launch, the Nano was unavailable and dealerships and many customers were turned off by the inability to inspect / test drive the vehicle before placing an order.

It’s uncertain whether the Nano’s poor domestic sales will affect Tata’s move into foreign markets such as Europe and South America.

The four door, five seat Nano is the branchild of Tata Group Chairman Ratan Tata. His brief was for a car that cost just 100,000 rupees (US$2,200) and would appeal to those who previously could only afford a motorcycle.

However, the forced closure of one of Tata’s factories in West Bengal and the subsequent relocation caused delivery delays and the spontaneous combustion of several Nano’s in the past have dampened the Nano’s reputation.

Darius Lam, an analyst at J.D. Power & Associates, remarks on the latter:

“The company has just mishandled the whole thing. First, the company said it was no big deal. Then, it was just some foreign objects.”

Like many in the automotive community, Mr. Lam does not believe Tata has done enough to investigate the cause of the fires and reassuring the public that it’s been properly addressed.

To count the flagging sales, Tata is allowing buyers to take immediate delivery of their Nano from the showroom and opening new locations in smaller cities. The car’s warranty has been extended from 18 months to four years, while the company is stressing the Nano’s power and durability to assuage the public’s grievances.

A company insider has stated that Nano sales are back on the rise. Company spokesman Debasis Ray elaborates:

“As we began open sales, our learning was that, even though the Tata Nano is affordable for thousands of customers who do not own a car, it is still a significant decision to enter the four-wheeler category.”

It is believed that many of the Nano’s 71,000 owners are happy with their car, citing its performance, 41 mpg fuel economy and spacious interior as the main reasons for purchasing it other than the low price.

Even so, many analysts believe that unless the brand makes further strives to improve safety and public perception, the Nano will still lag behind its Korean and Japanese competitors in the Indian market.

By Tristan Hankins

Via: New York Times

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Toyota Tries to Break Indian Market with New Low-Cost Etios Sedan

The world's largest automaker, Toyota Motor Corp., is eyeing emerging markets with a new low cost model that was unveiled this week in India. The production version of the 2010 New Delhi Show Etios Concept is available at launch as a four-door sedan model, but will be joined by a five door hatchback called the Etios Liva in April of 2011.

The company said the Etios has been developed specifically for Indian customers and will be built at a plant in Bidadi, near Bangalore. However, Toyota eventually plans to offer the small sedan in other emerging markets such as China, Brazil, Thailand and possibly certain regions of South America.

The 4.265mm (167.9-in.) long sedan boasts a rather large boot with a luggage space of 595-liters and is powered by a newly developed 1.5L, 16V DOHC engine coupled to a 5-Speed manual transmission. The Etios sedan will be available in four variants, J, G, V and VX, with prices ranging between 4.96 Lakhs and 6.86 Lakhs making it the company's most affordable offering in India.

Commenting on the launch of the Etios, Mr. Akio Toyoda, President TMC said: “India is a key market for our overall strategic growth plans, and the launch of the Etios is definitely a milestone not only for Toyota in India but for Toyota globally."

"We at Toyota believe, ‘the road makes the car’ and the Etios is a product of real-world testing on roads across India. Our testing has covered a hundred thousand kilometers on every kind of road that Indian drivers encounter, from Kolkata to Mumbai, from the Himalayan foothills to the tip of the Indian peninsula

According to JD Power, Toyota sold a little over 60,000 cars in India through October, compared to 870,000+ sales from Marutti Suzuki, which is the market leader in the country.

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Honda Brio Prototype Previews New City Car for Asian Markets

As a follow up to the New Small Concept model showcased this past January at the Auto Expo 2010 in New Delhi, India, Honda revealed the pre-production version of its new small city car called the Brio at the 27th Thailand International Motor Expo (press day: November 30, public days: December 1-12.).

Developed for Asian markets and scheduled to be introduced in Thailand and India in 2011, the Brio has a small footprint measuring just 3,610mm in length, 1,680mm in width and 1,475 mm in height. Even though the Brio keeps the basic styling theme of the concept car, the pre-production prototype's design has been watered down with the new grille looking like a last minute addition and a not very attractive one at that.

The mass-production model, which will be an entry-level car in newly emerging markets, Honda will develop unique versions for Thailand and India to reflect different customer needs in those markets.

Honda said that the Thai model is scheduled to be introduced in March 2011 with a starting price of approximately 400,000 baht or about US$13,300. It will be powered by a more fuel efficient engine returning a combined consumption of less than 5 lt/100km [47.0 mpg US].

For the Indian model that is planned to be introduced within 2011, the Japanese automaker said the engine choice will reflect the need for "a good balance between vehicle performance and price."

“Honda would like to expand the joy of mobility to more customers in Thailand, India and other Asian countries through the introduction of a new small vehicle with compact and highly efficient packaging by utilizing our own experiences cultivated by motorcycle business here in Asia,” said Takanobu Ito, President and CEO of Honda Motor.

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The World's Cheapest Car

The Tata Nano car is introduced at the 9th Auto Expo in New Delhi, India

A lot is riding on the the world's cheapest car. In the words of Ratan Tata, chairman of the company behind the upstart econobox, India's "People's Car" will be a "safe, affordable, all weather vehicle for a family which is today traveling on a two wheeler." The entry level model is ticketed at just over $2,500 — or the equivalent of 100,000 rupees or one Lakh — a revolutionary price where the average lower middle class income is $200 a month. (For comparison's sake, in the early 1970s, Honda introduced affordable, good quality Civics at about $2,200, which adjusted for inflation would now be nearly $10,500.) It could well be one of the most important cars ever designed.

The car emerged at a much-anticipated launch on Thursday: a cute, short thing, with four doors, tiny wheels placed out at the far corners of the body and what looked like plenty of room inside. The Nano has just enough space for a briefcase or small bag under the hood. The engine — all two cylinders, 624cc and 33 horsepower of it — is in the back, just like the Volkswagen Beetle of old. The speedometer and other instruments cluster in a central pod in the middle of the dashboard rather than directly in front of the driver, the easier (and cheaper) to offer both left- and right-hand versions when Tata Motors starts exporting the car to Southeast Asia and Africa in a couple of years. The top third of the over-sized headlights act as the turn signals (indicators) and look like cheeky yellow eyebrows above the main lights. It has a top speed of about 60 miles per hour. "Car companies are in probably the most emotive business area that one can find apart from fashion," company chairman Ratan Tata told TIME a day before the big launch. "There will be people who say it looks like a toy, but if you consider the value proposition I think the car is great."

Tata hopes the Nano will help millions of poor people around the world — the "Bottom of the Pyramid" in developing world marketing-speak —switch from two wheels to four. Environmentalists, city planners and even some competitors, on the other hand, warn that the new vehicle will clog up India's crowded roads and add clouds of pollution to its already filthy air.

Ratan Tata emphasized that the new car complies with India's emissions laws and even with Europe's much stronger Euro 4 standards. Emissions, Tata says, are "lower than a scooter's today". The company claims the car will also deliver 50 miles per gallon, or better than 20 kilometers per liter, which would make it one of India's most efficient vehicles, and vastly more efficient than the average in the U.S. Chief U.N. climate scientist Rajendra Pachauri, who shared last year's Nobel Peace Prize with Al Gore, said recently that he was "having nightmares" about the low-cost car. "Dr. Pachauri need not have nightmares," said Ratan Tata at today's unveiling. "For us it's a milestone and I hope we can make a contribution to the country."

But with India's road infrastructure struggling to keep up with explosive growth in car sales, won't the new Tata just add to the country's road hassles? That's a problem the Indian government has to deal with, not manufacturers, Tata said. "We'd certainly be concerned if our vehicle created absolute chaos all across India," he told one questioner who complained that his morning journey of a few miles across Delhi took over an hour. "But if you had chaos today and it did not include our vehicles, then I would suggest the problem has to do with something else besides the presence or absence of our vehicles." India, he agreed, "does desperately need mass transit systems... both within cities and between cities." But poor Indian families also have a right to what millions take for granted elsewhere in the world. "Should they be denied the right to independent transport?"

Eventually, Tata Motors hopes to sell a million Nanos a year. Even before it goes on sale, though, it has become an important symbol of an emerging trend in the developing world, a new brand of innovation that makes more out of less and engineers clever but cheap fixes to problems that Western companies might throw expensive technology at.

The head of the Nano team says Tata Motors has applied for 34 patents on various components and design features on the new car, though he was short on specifics. The car reportedly uses super strong glue rather than welds in some joints — a technique that a handful of other car makers have used before, though perhaps never as extensively. Tata Motors' cost-cutting drive was relentless: the windshield has just one washer rather than two, the metal steering column was hollowed out to save on steel, cheaper bearings — strong enough to perform well up to (70 kph) but fast wearing beyond that — may be used rather than more expensive components. "It's a very tight package," Ratan Tata said. Given the steep rise in the cost of steel, rubber and other inputs in the past few years, it's possible that the entry level Nano might not break even, though Tata made a point of saying the "one lakh" price tag in India will stay because "a promise is a promise". The car, the company says, will make money across its various models.

The Indian magnate, who has hinted he will soon retire, sees the Nano as an evolution rather than a revolution. "What is revolutionary anyway?" he asked TIME before the launch. "If you asked me would it be possible to build a lower cost car than this — a car say for 50,000 rupees [$1,300] — I might be driven to say, 'Yes, it might be possible.'" He pauses for a few seconds. "I don't think anything's impossible." The half lakh car anyone?

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