INDIA: Tata seeks to boost ailing Nano sales

By just-auto.com editorial team | 9 December 2010

Tata is looking to boost flagging sales of its Nano budget cars by announcing a raft of customer incentives.

Nano sales in November slumped 85% over concerns over safety and the availability of finance.

Production problems caused by the move to a new plant have also been an issue, said the company, which reported just 509 Nano sales in November.

Sales of the Nano are now at their lowest level since its launch as the world's cheapest car. Concerns have arisen following a series of fires affecting the car, even though the carmaker is offering free safety upgrades.

Sales of the Nano have fallen for four straight months from a high of 9,000 cars in July this year.

Tata is now offering a four-year/60,000km manufacturer’s warranty, at no extra cost and extending this to all existing owners of the car. In addition, all new buyers have the option of a comprehensive maintenance contract at only INR99 per month (US$1.40).

The Nano was conceived as the 'people's car' for India's aspiring middle classes, many of whom currently use motorbikes but want to upgrade to four wheels.

Over 71,300 have been sold since its launch in July last year.

The company last month began offering free safety upgrades for the Nano to assure more than 70,000 owners in India that there are no generic defects in the car which costs just $2,500.

The upgrade involves new safety features being added to the exhaust and electrical system although the company stops short of calling this a recall.

About half a dozen fires have been reported involving the four door car although there have been no injuries. Tata said an investigation by a team of internal and international experts concluded the reasons for the fires were "specific to the cars which had such incidents" rather than being a general fault.

Production has been moved to a new plant in Sanand, in northwestern Gujarat state, and normal assembly is expected to be resumed within the next two months.

Tata also said that financing options of up to 90% are now available to customers at low rates and “a host of financiers” have come forward to offer extremely attractive packages.