Tata Motors plans new variants of its ‘one-lakh’ (INR100,000) Nano small car to overcome challenges posed by high fuel prices, which could negatively impact sales, company chairman Ratan Tata has said.
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Noting that the company’s Nano plant in Singur was expected to come into operation in the last quarter of 2008, Tata, in a letter to shareholders in the annual report for 2007-08, said that manufacturing facilities would be expanded to meet domestic and global demand in the future, the Economic Times of India reported.
“New variants of the Nano are also currently under development to meet the new environmental and fuel price challenges, as also the market requirement of several international markets,” he said.
While terming the year ahead as “a year of major challenges,” Tata said that “higher fuel prices will negatively impact both commercial vehicles and passenger car sales”, according to the paper.
He also said there would “an enormous and unprecedented increase in material costs in steel, tyres, and the like, and there will be the impact of tighter money supply with higher interest rates.”
“In addition, the company will have to manage the completion of the Singur plant and introduction of the new Nano in the market. While dealing with these challenges in India, the Tata Motors’ operations will also have to absorb the cost of the [Jaguar Land Rover] acquisition, and deal with its integration,” he said.
While noting these challenges appear daunting, Tata said “the year ahead will be no more daunting than the challenges they have faced in difficult years in the past”, the Economic Times of India reported.
