Tata to reposition Nano as a small city car?

Tata Motors Limited, which is India’s biggest automobile manufacturer with respect to revenue generation is now working to reposition its Nano as a “Smart City Car”. This was confirmed by the Chairman of Tata Sons Limited, Cyrus Mistry on Wednesday.

Cyrus Mistry told the shareholders of Tata Motors that the company is working to roll out a new variant of Tata Nano. This new variant will be showcasing power steering, improved interiors and higher fuel efficiency as its prominent features. This was declared by Cyrus at the 68th annual general meeting in Mumbai. This car will target the young buyers. The company is also going to launch a CNG powered variant of the Nano in the year ahead.

He was answering questions regarding the company’s plans on changing the perception of its Nano as a “cheap car”. The car was launched in the year 2009 in India and was offered at an unbelievable price of Rs 1 lac only. Thus the car came to be popularly called as the “1 lac car” and also as the “cheapest car” which was in a way used ‘offensively’ by the critics.

Tata Nano
Initially Nano got a great response from the Indian masses but in the past few months the sales have dropped considerably. The Indian auto market is not in its friendliest mode since the past few months and almost all the manufacturers are suffering from lower sales figures. Talking about Tata Nano, last year the car sold a total of 27,625 units between April to July. In this year the car sales dropped alarmingly to only 6,017 units. These figures have been revealed by the SIAM (Society of Indian Automobile Manufacturers).

Cyrus Mistry also infirmed the shareholders that the company is planning to reposition the Tata Aria which is their multipurpose vehicle along with the Sumo Grand models. This will be a move taken by the company to overcome the competition in the utility vehicle segment. Currently in India, this segment is ruled by Mahindra and Mahindra Limited.

The company market has dropped significantly in the passenger vehicle segment. In July, the company’s market share dropped down to a mere 8%.

The shareholders expressed their concern over the poor service quality of Tata cars. Cyrus Mistry answered saying that “We have to do a lot on the service front,” Tata Motors is also working on expanding its dealership network in the country and also improve the overall product reliability.

In the commercial vehicle segment, the company is planning to launch the Prima range of trucks as well as Ultra range of light commercial vehicles. The company has been under a lot of pressure due to the slow economy in the country which has affected the demand for these vehicles. The company is also facing an ever increasing competition from new arrivals like Daimler Commercial Vehicles Pvt Ltd.

Tata Motors saw a fall of 23% in the month of June. The company has been able to make some good sales with its Jaguar Land Rover products which seem to have quite popularity in the auto market. The company has not succeeded with some if its operations though.

The company earned a total profit of Rs 1,726.07 crores in this year which is less as compared to the last year. The net sales although have increased to Rs 46,751.26 crores. Mistry said that “We dipped into our reserves for the dividend payout,” said Mistry. In the last business year the company’s passenger car and truck units made use of only 48% of the total installed capacity of 1.6 million. Mistry also said that the company will be investing Rs 20 crores in Jaguar’s Indian operations.

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