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Chief Says Cheap, Everyman Nano Is No Flop

Thu, 01/05/2012 - 7:29am
Tim Sullivan, Associated Press

NEW DELHI (AP) — The Tata Nano, the dirt-cheap everyman's car that started with great fanfare but faced seemingly endless troubles, will eventually prove itself a strong product, the outgoing Tata chairman said Thursday. But he acknowledged the company had not handled its rollout well.

The tiny, $2,600 Nano, which was unveiled three years ago as an automotive alternative for Indians who wanted to move up from motorbikes, found itself bogged down by production problems, poor sales and a series of car fires.

But Ratan Tata, the soon-to-retire head of the Tata business empire, called it an "affordable, all-weather family car" that would flourish.

"I don't consider it a flop," he told reporters. "I consider it that we have wasted an opportunity."

Among those lost opportunities were an inadequate advertising campaign and dealer network, he said, slowing early sales.

"I believe we will see a resurrection of this product as we move forward," he added. "Whatever stigma has been attached to it will be undone."

He said Tata planned to eventually launch a Nano-style vehicle in Western Europe and the United States that would not be as stripped-down as the Indian model.

The basic Nano has no heater, no cup holder and one windshield wiper. But it also costs just 140,000 rupees, or about $2,600, and gets 55.5 miles to the gallon (23.6 kilometers per liter).

The Nano's troubles began before the first one hit the road, with violent farmer protests forcing Tata to relocate its factory to a different Indian state, and delaying the launch. A string of fires scared off some customers, and last month Tata announced it would replace the starter motors for free in 140,000 Nanos.

Monthly sales were as low as 509 units in late 2010, though they have since rebounded. The company sold 7,466 Nanos last month.

Ratan Tata retires in December 2012 as head of Tata Sons, the holding group at the helm of an immense business empire that spans cars, hotels, steel and software. Tata Motors bought Jaguar and Land Rover in 2008.

Tata will be replaced by Cyrus Mistry, a deputy chairman of Tata Sons.

 

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