The World¡¯s Cheapest Car May Not Survive Another Year

When it was first showcased at the Auto Expo 2008, it was pitched as the world¡¯s most affordable car, with an asking price of Rs 1 lakh. Many thought it wasn¡¯t possible, but Tata Motors stuck to its guns and priced it as promised when the car was launched in 2009.

But 10 years hence, it looks like the end of the road is near. In the month of June, only one unit of the car was produced. 275 units were produced in the same month in 2017. A far cry from the initial 250,000 unit target the company was hoping to achieve. Even the export market seems to have dried up ¨C no units were exported in June this year as opposed to 25 in the same month in 2017.

Reuters

It only gets worse for the Nano. Next year brings with it the implementation of new standard safety features in all car models. These include airbags, seat belt reminder, speed alarm that comes on when the car crosses 80 km/h and a manual override for central locking systems. Crash safety norms too have been notified and all existing cars are supposed to meet the full frontal, offset frontal and side impact standards by October 2019.

All this will cost money to implement and Tata Motors may not be willing to spend it. Why? Because the Tata Motors suffers loss on each Nano sold. When Cyrus Mistry was unceremoniously shown the door, in his scathing letter he had revealed that the company keeps making the Nano for ¡°emotional reasons¡±. His letter also said that the car had cost the company losses to the tune of Rs 1,000 crore.

Reuters

Company¡¯s subsidiary Jaguar Land Rover has been the source of overall profits for the past few years. But with Brexit threatening losses to it next year, Tata Motors may not be able to hold out any longer. This will also threaten the proposed plans to sell shells of the car to a third party that wanted to sell the Nano as an electric car.

The dream of selling the world¡¯s cheapest car may just have been a bridge too far even for Tata Motors.