As an initial strategic plan of Tata Motors, the company was banking on the Tier III and IV cities to retail the affordable Nano small car. Tata had also commissioned opening of 300 exclusive Nano dealerships; which now have been restricted to 100 dealerships only after the car failed to generate any interest among the buyers, leading to dismal sales. Tata had to re-position the Nano as a city car and is betting big on the newer variants to improve the sales of the small car.
Tata Nano’s latest variant is the Twist model that gets a power steering, while an AMT version showcased at the 2014 Auto Expo is also on the cards and will be launched soon. The company wants to brand the Nano as an ideal city car for the masses and get rid of the cheap tag that the car was launched with. In rural sections, the company will continue to operate the 100 exclusive dealerships, but will not add any new ones. The new brand positioning showcases the Nano as an urban friendly car that is cool and vibrant. The company is targeting the youth with the Nano, instead of first time car buyers.
As opposed to the dream, the Nano turned out to be a loss making venture for Tata Motors. The Sanand facility with a capacity to produce 2.5 lakh units per annum is running way below full capacity. The last financial year saw around 21,129 units of the Nano being pushed out of the showrooms, a fall of 60.7 percent compared to FY2013. Tata however, hopes that the new repositioning of the small car will help the company sail through the sluggish performing automobile market. The company also had a diesel Nano in the works, which for now has been a shunned citing change in the market conditions.