As 2008 draws to a close, all eyes will be set on the much-awaited Tata Nano, reportedly to be launched in the last quarter of this financial year (Jan-Mar’09). The company dealers however are still left clueless and are not in any position to tell customers when ‘the people’s car’ will be launched. Tata motors is taking a defensive by not revealing much about the Nano. IAB to the reader's rescue!
"Most likely Soft-launch between January and March"
The Tata Nano, which was unveiled in January 2008 took the world by storm and placed Tata motors in the world stage, but nearly a year later there is still no permanent factory to build it in. Tata has started the Nano’s production at its Pantnagar (Uttarakhand) existing facility and has geared up to roll out its first batch of Nano cars in the first few months of 2009. Despite the start of production, Tata has still not revealed a definite launch date.
Fresh issues in Gujarat at Sanand:
Farmers have filed a case against the Indian government and Tata Motors, demanding higher compensation for land sold to support the latest Nano factory in Gujarat. Sales of the Nano in India was initially scheduled for October of this year (2008) - was then postponed to Ratan Tata's birthday (28th December) – and now will not come out until next summer.
Plans to build a new factory in Gujarat seemed to put the Nano back on track. But another land dispute has sparked a sense of déjà vu for Tata.
“There is no way this plant could operate efficiently unless the environment became congenial and supportive of the project,” a Tata spokesman said.
“The land dispute is real,” said Paul Blokland, managing director of Segment Y, an automotive consulting firm based in Goa, India. “The locals say that the lease on the land has run out, and that it therefore reverts to them, while the government says it bought off the original landowners in the 1920s.”
Singur History (Déjà vu):
This is not the first time that Tata has faced off against angry farmers and crafty politicians. A similar series of protests erupted the same way at Nano's Singur plant, in the state of West Bengal. Protesters (led by Mamata Bannerjee) alleged that Tata forced farmers from their land or paid only a fraction of the land’s true value.
"Loss of $350 million at Singur"
By October 2008, the Singur protests had grown in size and intensity. Highways surrounding the factory were at a standstill, and workers were being threatened. Tata finally abandoned the Singur factory, in which it had invested $350 million, according to the BBC at the time. So, the company moved the mother plant to Sanand in Gujarat from Singur, on account of opposition from Trinamool Congress over the land acquisition.
Abandoned - The Singur Plant
Uttarakhand Govt to the rescue - Offers 45 acres Extra land
Tata Motors has been alloted 45 acres of extra land at its Pantnagar facility from the Uttarakhand government for Nano project. Once again, Tata has been forced to find a quick solution. As we reported recently, Nano production has already begun at Tata’s existing factory in Pantnagar in the northern state of Uttarakhand. And according the Economic Times, Tata has received an allotment of land from the Uttarakhand government to expand the Pantnagar factory for Nano production.
This land allotment is likely to help the company in launching the world`s cheapest car priced at Rs 100,000.
Even with a rapid expansion of the Pantnagar factory, sales of the Nano will (at least initially) fall well short of Tata’s original expectations, Mr. Blokland said.
“The plant in Gujarat will not start serious manufacture until late next year,” he said, adding that the Nano will be produced in small numbers, between 3,000 and 4,000, in Pantnagar, calling it a “soft launch.” Further, the two plants - Pune and Pantnagar - will be working in tandem to make Nano happen till the mother plant in Gujarat comes up. “While parts are being made at the Pune plant, the final assembly of the car will be at Pantnagar,”
- This is far from the 100,000 annual sales Tata envisioned when the Nano made its debut at the New Delhi Auto Expo in January 2008.
- The previous Congress government, had given Tata Motors, 955 acres of land for its Ace truck plant at Pantnagar, out of a promised total 1,000 acres, according to State Chief Secretary, I K Pandey.
“Considering the current situation, the company may just launch one variant for time being. Depending upon the demand and once the mother plant comes up, a decision on the other variant will be taken,” says, Abdul Majeed, auto analyst and partner, PricewaterhouseCoopers (PwC). He said only small numbers of Nano will be available at the time of launch leading to long waiting period.
Tata, Nano and Economics:
Tata had originally planned to pump in Rs.15 billion at Singur but the investment was increased to Rs. 20 billion, when it shifted to Sanand. Originally, Nano was to be commercially launched around Durga Puja this year but postponed to the last quarter of this fiscal year. The company has already started Nano production, from its various locations, including Pune and Pantnagar until the mother plant at Sanand is ready.
Shares of the company declined Rs 4.05, or 2.54%, to settle at Rs 155.60. The total volume of shares traded was 499,254.00 at the BSE (Friday).
Tata Nano recently caught on the streets:
The only benefit of all these delays has been the availability of more time for Tata to perform real world testing. The Nano has clocked test miles in countries like Germany and Australia prior to its launch and after its unveiling in Delhi, the Nano has been spotted many times on highways of Maharashtra. Tata's initial batch of vehicles of some models had reliability problems and quality issues. Parts fell off after a few kilometers of driving, which will most likely not happen with the Nano, as it's been tested in hell.