Indians Not Interested in Tata Nano - World's Cheapest Car

In 2009, TataTataIndia, 1945 > present5 models
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introduced the NanoTata NanoIndia, 2007 > present2 photos
to the Indian market and sold it as the world's cheapest new car. It started at the equivalent of $2,000 and was the most basic transportation that could still be called a car. Tata predicted the Nano would be a massive success by granting auto ownership to an entirely new segment of the market, but they have been very wrong. Since 2009, Tata has sold 229,157 Nanos, and March sales were down 86% from the previous year. 

Tata has slowly added features to the Nano to try to appeal to buyers, and prices have grown to $2,600. However, buyers are still not interested. 

"Anyone who had a car didn’t want to buy it, because it was supposed to be a two-wheeler replacement,” said Tata Managing Director Karl Slym. 

The intended buyers who would be upgrading from a scooter to the Nano were not interested because they did not see the Nano as a real car. 

While the Nano starts at around $2,6000, it costs $3,700 to get a model with air conditioning and power windows. Air conditioning is considered vital in the Indian market. When RenaultRenaultFrance, 1898 > present189 models
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launched its first cars there last year, it made market specific changes to add separate front and rear AC units.

“People are buying the Nano for their mothers, fathers, children, second cars,” said Slym.

Tata itself is not in the best shape either. Its sales fell 15% in the last fiscal year, despite a 2.2% growth in the Indian car market. In the fiscal year, Tata sold 53,848 Nanos, down 28% from the previous year. 

The Indian auto market is still emerging. Just a few years ago, the car sales were relatively low and stagnant, but a rising middle class has boosted sales and demand for cars. Tata-owned JaguarJaguarUnited Kingdom, 1922 > present53 models
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Land RoverLand RoverUnited Kingdom, 1978 > present15 models
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, AudiAudiGermany, 1909 > present83 models
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and others have already established factories there.

Source: Business Week