Tata plans new marketing push for Nano to recover from fire controversy

Article by Anita Panait, on August 25, 2012

The chairman of Tata Motors, Ratan Tata, disclosed that he plans to re-promote the budget Nano minicar, after sales declined following fire incidents involving at least three cars. In an interview with Bloomberg TV India, Tata said that the Nano is something he would “love to make successful,” as it has yet to reach its full potential. Tata remarked there has to be another push to “make Nano what it can be." The Nano, conceived by Tata as the world's cheapest car, carries a starting price of INR141,898 ($2,565). It was developed as an upgrade option for millions of Indian motorcycle owners. Tata Motors launched the Nano in 2009. Sales plunged to just 509 units in November 2010 after the vehicles caught fire.

Although Tata Motors said that the fires were isolated cases, sales of the Nano continue to fall behind pricier models. Tata decided to develop the Nano after seeing a family riding on a scooter. Issues troubled the Nano even before its rollout. The carmaker was forced to desert an almost-complete plant in West Bengal state due to violent protests by farmers demanding the return of land purchased for the site.

After the fire incidents, Tata Motors lengthened warranties in December 2010 to four years or 60,000 kilometers (37,290 miles) and began offering up to 90 percent financing through Tata Motors Finance Ltd. The hike in borrowing costs, however, somewhat hurt the pockets of consumers that Tata Motors targeted to make an upgrade from motorcycles. Those target consumers chose to acquire cheaper two-wheelers, affecting sales of the Nano.

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