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By | December 2010
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SMALL CAR, BIG TROUBLE How Nano hit a big bump in India Production of the iconic Nano has come to a near standstill at the Sanand plant. As engineering & marketing problems mount, Tatas look for a lasting fix Lijee Philip MUMBAI THE Tata Nano was a small car that was expected to deliver big numbers — the new plant at Sanand in Gujarat was built to produce 2.5 lakh units a year, eventually ramping up to 5 lakh units. But 15 months after a high-profile launch, it has encountered trouble at every turn — three instances of the car going up in flames and a few cases of smoke emanating from it (the last was in September), confusion about its positioning, a rather unexpected bunch of affluent initial buyers, poor distribution reach, and financing bottlenecks. Nano’s sales have dipped from 9,000 units in July to 3,000 in October to just a little over 500 in November.     An ETreporter who visited Sanand on Tuesday met workers at the industrial zone who said production of the Nano has come to a near standstill; the number of workers there has decreased by 80% in the last month. The company declined to answer a specific emailed query on the firm stopping Nano production, even though it opened up to detailed interviews on all other aspects of the car.     Many dealers say they have not picked up any fresh stock during the last two months as they were trying to sell existing cars. Dealer inventories at the beginning of November are estimated to be 17,000-20,000 units, according to officials at Nano’s dealers and suppliers. The company says that inventory levels are not so high, though it declined to disclose numbers.     “I am a little surprised by the Nano’s sales figures,” says the head of a rival car manufacturer speaking on the condition of anonymity. “The car was positioned as an alternative to two-wheelers, but that’s not happening. Those looking to upgrade from two-wheelers are put off by the negative publicity (over the fires) and safety issues and buyers of the...

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