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Positioning Nano as world’s cheapest car a mistake: Mr. Ratan Tata

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Positioning Nano as world’s cheapest car a mistake: Mr. Ratan Tata
Positioning Nano as world’s cheapest car a mistake: Mr. Ratan Tata

Tata Motors’ Nano may have been a flop in India, but Ratan Tata, the former chairman of parent and conglomerate Tata Group still has hopes for the world’s cheapest car. Ratan Tata said he believes the mini-car still has the potential to take off in the home market. “We are trying to re-launch Nano with some differences,” said Tata, adding that the company has plans to launch the Nano outside of the Indian market.

Tata believes that there’s a lot of interest in Nano outside India. “Maybe, we can launch in another country like Indonesia, where it doesn’t have the stigma or maybe it can be marketed in Europe as a changed product,” he said.

The Nano, positioned as the “people’s car” starting at around $2,500 for a stripped-down model, has struggled to gain traction since its launch in 2009. Sales of the vehicle plunged 74 percent on-year during the April-September period to 10,202 units.

In October, Tata Motors introduced a new model of the car, the Nano CNG emax, an eco-friendly variant of the original Nano that can run on either gasoline or compressed natural gas in a bid to revive sales.

The automaker is also slated to launch a diesel-powered version of the vehicle by the end of March 2014

Tata says the marketing around the Nano as the world’s cheapest car is partly to blame for its failure to gain popularity. Instead, it should have been promoted as a safer alternative for the millions of families who tend to crowd more than two members onto two-wheelers.

“I always felt the Nano should have been marketed towards the owner of a two-wheeler because it was conceived to give people who rode on two-wheeler an all-weather, safe form of transportation, not (the) cheapest,” Tata said.

“It became termed as the cheapest car by the public, and [also] I’m sorry to say, by the company when it was being marketed,” he added.

On Corus The acquisition of European steel major Corus (now Tata Steel Europe) was expensive for Tata Steel, but it is the economic slowdown that exaggerated the cost, he said. Tata Steel had acquired Corus in 2007 for $12 billion, after a spirited bidding battle with Brazilian steel company CSN.

The acquisition catapulted the Tata Steel group to fifth largest steelmaker in the world with a capacity to produce about 25 million tonnes then. Prior to the buy, Tata Steel was 56th largest.

Soon after the deal, the global financial crisis crippled the world economy, puling down the demand for steel. To make the company viable, Tata Steel had to resort several rounds of job cuts and mothballing of loss-making units.

Tata said in the interview that the acquisition would not have been high had economy not deteriorated. The company was a good fit and gave Tata Steel crucial capacity addition and global position, he said.

He also exuded confidence that things are turning around at Corus now. The company must now focus on emerging markets to offset slowdown in US, Europe, he said.

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