Nano may be in the last leg of its journey

The Nano, the most famous car from the Tata Motors’ stable, is perhaps on its last legs. The highest monthly sales it clocked in 2016-17 was 1,100 in April last year.

Sales fell to an all-time low of 174 in March 2017. Cumulatively, the company sold 7,591 Nanos in 2016-17.

Compare this to when the ~1-lakh car was launched in March 2009. Initial euphoria around the car drew over 200,000 bookings by May 2009, a landmark in Indian automobile history. The car also acquired cult status globally for frugal engineering. In fact, the Nano was put on display at the Smithsonian’s Cooper-Hewitt design museum in New York in 2010.

Consumer interest in the car, however, dwindled following stray incidents of fire. By October 2009, Tata Motors had ordered pre-emptive checks on the car and retrofits. The damage, however, was done. By the time the Sanand factory started running in June 2010, the Nano had already missed the bus.

The initial idea was to build an affordable car that would draw the two-wheeler buyer. Initial projections showed such a car could have the potential to sell around 20,000 a month.

Tata Motors took the bold decision of building a dedicated plant for the Nano instead of making it at one of its existing plants at Pune and Pantnagar. The decision backfired. A farmers' agitation in Singur in West Bengal forced the company to relocate the plant to Sanand in Gujarat. The loss to Tata Motors is estimated to be around a few thousand crores.

Tata Sons’ former chairman Cyrus Mistry has pegged the cumulative losses arising from the Nano project at ~6,400 crore.

With the launch of automatic manual transmission and other peppy city variants, Nano sales showed some signs of revival in 2015. The GenX Nano, which sports a power steering and stylish interiors, was launched in May 2015. Tata Motors ended 2015-16 selling 21,012 Nanos, up from 16,901 in 2014-15.

Sales started falling after that and so far have not shown any signs of revival. The buzz around the coming death of the Nano is getting louder.

"The hatchback segment is very important for us. We have a strategy in place that will look at the best way of addressing the segment’s requirements,” a company spokesperson said.

The Sanand plant is now making the Tiago hatchback and the Tigor sedan. Banking on these two wellreceived products, the plant aims to reach full capacity in 2017-18. A couple of years ago, capacity utilisation of the Sanand plant had dropped to 20 per cent.