The journey of the ‘lakhtakiya’ car Nano by Tata Motors is finally coming to an end. The manufacturer is all set to discontinue the Nano soon. The game changer for the automobile industry ‘Tata Nano’ was first showcased at the 2008 Auto Expo and the automaker wanted to provide the customers with an affordable four wheeler option. Despite the car getting good response in the market, the manufacturer has decided to pull the plug on one of its most ambitious projects. The official announcement will be made by Natarajan Chandrasekaran, Chairman, Tata Motors at the carmaker's 73rd Annual General Meeting.
Though, Tata Nano initially started at quite high note, but last few years have not been that good for the small car in terms of sales. Tata Motors sold just 65 units of the model in April-June 2018 making it down by 92 per cent from the 872 units sold in the same period of the previous year. In June 2018, Tata sold 3 units and produced only one single unit of the Nano. Though in the month of July, 50 units were manufactured at the Sanand plant in Gujarat. This cleared the future of the car in the industry with no sign of sales picking up and the high costs involved in upgrading the Nano to meet the upcoming crash test norms.
The Indian government introduced latest crash test norms since October 1, 2017 for new cars and will widen in scope come October 1, 2019 to apply to all cars on sale in the country. However, the official date for end of production of the Nano has not been announced, it is likely that the company will not wait until the new safety norms kick-in. The carmaker is most likely to discontinue the model by the end of 2018-19 fiscal. However, the official confirmation is still awaited.
Why we are expecting Nano production to not make it any further after the 2018-19 fiscal is because, if Tata Motors pushes it further, then the automaker will need to invest more into the production of the car that will eventually lead to the price hike of the Nano, making it more difficult for the manufacturer to clear the stocks with so much competition in the segment.
According to the company sources, around Rs 400 crore was spent in developing the next-generation Nano that was codenamed as Pelican and the model was designed to meet the latest norms but the project has since then been abandoned by Tata Motors. However, not just the bas sales performance, but in order to make way for the future Tata Motors’ cars based on the automaker’s two platform strategy, Nano has been decided to be discontinued. Tata Motor's two-platform strategy for its future models includes ALFA and OMEGA platforms. The platforms will be modular and are aimed to help the carmaker achieve greater economies of scale and the recently announced Harrier will be the first product to be introduced as a part of the new focus.
The increased competition in the entry level segment is also the reason behind the world’s smallest car’s failure in attracting customers. With Maruti Suzuki, Hyundai and now Renault offering cars loaded with premium features in their cars in the segment, it has been a tough time for the Nano for quite some time. Let’s see if the automaker plans to introduce any other vehicle in the segment in future.