Launch of Lakhtakiya (Tata Motors' Nano) was one of the much awaited events of the year. Ratan Tata managed to put the base price at 1 Lakh. Higher version will cost more based on the additional features.
Things have changed a lot from the announcement date till now.
Thanks to Mamata effect, the manufacturing plant completion is already behind the schedule. Project delay means cost overrun. If we go by the market rumor, TATA motor has already lowered their procurement figures from various vendors. This means that the launch may not be on a large scale. Initial rollout of Nano will be less in numbers.
Rise in the input costs will also put a lot of pressure on the margin. Rise in steel price and other input materials will definitely hit the bottomline. They have put an upper cap of 1 Lakh on the selling price (for base model) but putting a freeze on the cost is not possible. It is something that is determined by the market forces. Inflation figures are already making some new high every week.
Third hit would be from the competitors like Maruti and Bajaj. Maruti has already announced its plan to bring a trim down version of its ‘Maruti 800’ model. With so much experience in India car market and the already depreciated machinery, reducing the cost will not be a big challenge for Maruti. Existing distribution network and vendors will add to the advantage.
Ratan Tata has always come out in flying colors in the time of adversity. People were apprehensive at the time of Indica launch. I am sure Nano will not only clear these hurdles but win the hearts of the middle class who wants a safe vehicle. With so much innovation I am sure things would improve by the launch time. They have already filed for 34 patents. I am sure TATAs will come out with some new distribution model to reduce the cost. Adding to this is the cute look of the car which every middle class Indian want to own.
Things have changed a lot from the announcement date till now.
Thanks to Mamata effect, the manufacturing plant completion is already behind the schedule. Project delay means cost overrun. If we go by the market rumor, TATA motor has already lowered their procurement figures from various vendors. This means that the launch may not be on a large scale. Initial rollout of Nano will be less in numbers.
Rise in the input costs will also put a lot of pressure on the margin. Rise in steel price and other input materials will definitely hit the bottomline. They have put an upper cap of 1 Lakh on the selling price (for base model) but putting a freeze on the cost is not possible. It is something that is determined by the market forces. Inflation figures are already making some new high every week.
Third hit would be from the competitors like Maruti and Bajaj. Maruti has already announced its plan to bring a trim down version of its ‘Maruti 800’ model. With so much experience in India car market and the already depreciated machinery, reducing the cost will not be a big challenge for Maruti. Existing distribution network and vendors will add to the advantage.
Ratan Tata has always come out in flying colors in the time of adversity. People were apprehensive at the time of Indica launch. I am sure Nano will not only clear these hurdles but win the hearts of the middle class who wants a safe vehicle. With so much innovation I am sure things would improve by the launch time. They have already filed for 34 patents. I am sure TATAs will come out with some new distribution model to reduce the cost. Adding to this is the cute look of the car which every middle class Indian want to own.
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