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Tata Motors plans Nano upgradation - Mr.Bhat - 12-13-2010

Tata Motors will introduce more features in the Nano to boost sales that sputtered to 509 units in November.

The upgraded Nano, the world’s cheapest car, will come with power steering, which makes driving easier, and a five-speed gear box. The new variant, which will be launched in the first quarter of 2011, will also have more frills such as adjustable seats, said two industry executives close to the company. The five speed gear box or transmission is intended to improve fuel efficiency and make it easier to drive the car at higher speeds.

The company may also expedite plans to launch a diesel variant, the executives said.

The company declined to comment in detail. “It is Tata Motors’ practice to continuously add new features to its cars. As and when any feature is added, we will make necessary announcements,” said a spokesman.

The Nano, powered by a 624-cubic centimetre petrol engine, is currently being sold in three versions. While the base variant has no air-conditioning, the mid and top-end model have more features including air-conditioning. The new vehicle, which will hit the roads early next year, will be 5-10% more expensive than the current top-end variant. The base model of the Nano costs Rs 1.37 lakh (ex-showroom) in Delhi.

But the Nano with enhanced features will still be much cheaper than its closest rival, the basic version of Maruti Suzuki’s Alto which has an on-road price of Rs 2.53 lakh. The on-road price includes taxes such as octroi.

“Tata Motors has to do everything to get back customer confidence,” said Abdul Majeed, auto practice consultant, PwC.

The move to add new features to the small car, which was launched in April 2009 targeting families wanting to upgrade from a two-variant, comes after a rapid deceleration in sales. “Dealers give us feedback which we try and incorporate into the cars on a continuous basis,” said a senior company official.

The new product is being tested at the Nano plant in Sanand, Gujarat. “Test drives for a slightly better version of the small car is on in Sanand. It has stylish interiors and power-steering,” said a person who is familiar with the development.

The Nano’s production has come to a near standstill at Sanand after the vehicle’s sales stagnated following rising prices, lack of cheap finance and some incidents in which the car caught fire. In response, Tata Motors has decided to install additional safety features in at least 70,000 Nanos already sold, in an effort to win back customer confidence.

The company has followed this up with a series of steps last week including an offer of a four-year warranty and a more detailed maintenance contract. “Footfalls have increased and we are sure that sales will pick up with these new initiatives. We have already ordered for Nanos, as our stocks are all cleared,” said a leading Mumbai-based Tata Motor dealer.

Tata Motors has attributed the decline in sales to its inability to reach smaller towns. The company says it is setting up special Nano access points for customers in the hinterlands to experience and test drive the car. Through these initiatives, Tata Motors will cover the entire country by March 2011, officials said. “The additional features will not have an immediate impact on sales,” said an auto consultant with a multinational firm.

RE: Tata Motors plans Nano upgradation - nairrk - 12-13-2010

So, their concept of - a Car for Rs.1 lakh - has no more meaning now!!!!