Tata stops Nano supplies to dealers

Pune: Tata Motor, which launched its ambitious car Nano, nearly a decade ago, is no longer dispatching it to its dealerships, but the world’s cheapest car is being offered at discounts to cut down inventory level ahead of April deadline to discontinue production.

The Mumbai-headquartered auto major’s dealerships across the country confirmed that the Tata Nano hatchback has been taken off from production.

Interestingly, most of these dealerships are enticing buyers with a minimum discount of Rs 15,000-Rs 20,000 on the 2018 inventory.

Auto analysts said with anti-lock breaking system or ABS to be mandatory on all cars sold from April 1, 2019, production of Tata’s iconic small car, which lacks this key safety feature, will finally end.

With no demand for the model, it makes no financial sense for Tata Motors to invest in upgrading the Nano and giving it ABS at the end of its life cycle.

Therefore, the mandatory ABS will be the final blow for the Nano, and the car will be discontinued in April 2019, analysts pointed out. They pointed out that Tata Nano “will die on its own death because it will not meet safety regulations”.

Analysts also pointed out that from July 1, 2019 all cars sold in India will have to be equipped with at least a driver airbag, a speed warning system, a seatbelt reminder for driver and co-driver, and rear parking sensors as standard.

This will be followed by more stringent crash test norms by October 2019.

And finally, from April 1, 2020 onward, all cars sold in Asia’s third biggest car mart will have to meet the stringent BS VI fuel emission norms.

“As mentioned before, the Nano in its current form will not meet the new safety and emission norms and may need infusion of fresh investments. No decision has been made yet in this regard. We continue to produce Nano catering to customer demands,” the Tata Motors spokesperson told Financial Chronicle.

Sales of the Nano model hit a new low in June 2018, when the company sold just three units, according to Society of Indian Automobile Manufacturers, a top lobby body. Also, during the entire month of June 2018, only one Nano was produced whereas the Sanand factory has a capacity to produce 2.4 lakh units a month. Between July and December 2018, the company found only 310 buyers whereas the dream was to sell it in thousands every month.

The company in January did not produce nor sell even a single unit of the small car, which was once dubbed as the ‘people’s car’.

“Tata Nano is emotionally attached to all the Indian engineers and auto enthusiasts of Indian auto industry. It is a sad thing to hear that the brand is not making any fresh investment to revive Nano car and also Nano to be discontinued is a sad chapter for the entire Indian automobile industry,” Gaurav Vangaal, country lead, LVP forecasting with IHS Markit told Financial Chronicle.

The iconic Nano was launched in 2008 but the trend of declining sales of the Nano was seen in 2018 when the company sold 65 units in mid-2018 which then dropped to a mere three units.

“Decisions on product life cycle is a holistic view taken after considering the market developments, regulations and emerging competitive landscape,” the Tata Motors spokesperson said.

Last year, Cyrus Mistry, the former chairman at Tata Group, had stated that Tata Motors had already lost '1,000 crores in keeping the Nano alive. He had also decided to discontinue Nano, but the Tata Group board members did not allow him to.