Nano! This one word has come to have so much of meaning for Indians, especially to those belonging to the middle and lower classes. It is a dream which they were first exposed to in 2003 when Ratan Tata announced his intentions of designing a people’s car which was low cost, environment friendly and still high on performance. Along with Tata, millions of others lived this dream and finally saw it come to life on 23rd March 2009 at the Crystal Room at the Taj Mahal Hotel in Mumbai amidst much fanfare.
But how well timed really is the debut of the world’s cheapest car? The demand for vehicles has taken a severe downward plunge especially after the difficult times faced by auto giants General Motors and Chrysler in Detroit due to the global recession. Even Tata Motors hasn’t proved to be immune to the recession. The sale of its commercial vehicles has gone down and the company has to deal with the debt from its purchase of luxury brands Jaguar and Land Rover last year.
What might work in the favour of the company here is the fact that they will be spared most of the unnecessary marketing costs as demand already far exceeds supply. Currently it has a production capacity of only 45,000 cars per year. This will definitely result in long waiting lists and disappointed customers. But just the whole idea of actually owning a car which was earlier out of question will make people never give up their attempts to purchase one.
However market analysts feel that the Nano will have a very minimal contribution to the revenue of Tata Motors. They say it will take at least four to five years for it to break even and to recover development costs. Also more profit is to be made from the sale of the fully air conditioned higher end variant. But the company hasn’t yet decided how many high end versions it is going to produce.
All that it means for Tata Motors is a waiting game which hopefully will come to a fruitful end soon. The entire group is currently facing a debt but have their hopes pinned on the Nano to make a vital change. As for the people and their demand for the Nano, it is always going to move northwards and never southwards. This could be good news for Ratan Tata especially after the new factory in Gujarat is functional.
What is strange is the fact that in spite of the recession, there hasn’t been a decline in the demand for the Nano. Is it just the low cost? Or is there more to it? The fact that the Nano has also been our own dream also plays a role. For most people owning a Nano is like achieving a milestone in their otherwise mundane lives. The emotional ties attached to the Nano are also what make it so popular. Especially in a country where so much importance is given to the owner of a car- A status symbol.
Whether the recession actually plays a role in the success of the Nano is something that only time will tell. But the bottom line is that the Nano has inspired and encouraged a lot of people to follow their dreams. Just like Ratan Tata followed his.