After realizing low sales of the Tata Nano, Tata Motors is coming up with an alternate plan to produce another hatchback simultaneously with the Nano at its underutilized Sanand plant in Gujarat. The Tata Nano project initially aimed to produce 2,50,000 units per annum. Last month in April, Tata Motors managed to sell only 948 units of the Nano, which means that the Sanand plant’s capacity of producing 2.50 lakh units per annum is going down the drain. In order to utilize the vacant capacity, Tata Motors is considering production of a new compact hatchback.
The current capacity utilization at the Sanand plant is less than 20 percent and Tata Motors is facing a major loss on its cost per car from the Gujarat plant. The company is aiming to improve capacity utilization and gain from the tax incentives; hence the new project of a compact hatchback. The new hatchback from Tata Motors, codenamed X0 is currently under development at the Sanand plant. The X0 hatchback will be based on the Indica platform and is intended to be positioned between the Nano and Indica.
Tata Motors is also planning to launch the updated 2013 Tata Nano, which will hit the production lines only after the dealerships clear the existing Nano stock. The manufacturer is betting big on the facelifted Nano and expects that the new model will boost sales of the Nano significantly. In order to give space to the Nano facelift and X0 hatchback production, Tata Motors has already moved the production of the Vista hatchback completely to the Tata-Fiat joint venture plant in Ranjangaon. The new hatchback under works is expected to hit the showrooms in 2015.
Source – Economic Times