Selling Nano as 'cheapest car' was a mistake: Tata

Last Updated: Sat, Nov 30, 2013 05:02 hrs

Ratan Tata, chairman emeritus of the Tata group, has said selling the Nano as the "cheapest car" was a mistake. "It was termed the cheapest car by the public and, I am sorry to say, by ourselves; not by me, but the company, when it was marketing it. I think that is unfortunate," Tata told CNBC.

Now, Tata Motors is considering launching the Nano in a new avatar in another country, and, subsequently, bringing it to India for a fresh start. "May be it (Nano) gets launched in another country such as Indonesia, where it doesn't have the stigma, and the new image comes back to India. Or, maybe as a changed product that is marketed in Europe. There's a lot of interest in the Nano outside India," Tata said.

Tata Motors is working on re-launching the Nano, after incorporating changes. From its peak sales of 10,000 in April 2012, Nano sales have fallen to less than 2,500 units a month in India. Though Tata Motors tried to re-launch the marketing campaign for the model, targeting the youth with added features, this has failed to cut ice with youngsters.

Customers have shunned the Nano for its cheap car tag and for its Spartan interiors.

In an interview to global bank Credit Suisse, Karl Slym, managing director of Tata Motors, said the company was implementing several cost-savings measures that would save up to Rs 3,000 crore a year. He added Tata Motors was reducing the number of suppliers from 1,400 to 400 and going for major platform consolidation by 2016. All the 12 new models will be made on the same platform. These steps would result in savings of Rs 3,000 crore a year within three years, Slym said.

By 2020, Tata Motors may have up to 12 new vehicles, including cars and sports utility vehicles (SUVs), on the new platform. A new SUV, which will share the Jaguar Land Rover platform, will also be launched. Slym said the revival in the car segment would precede that in the commercial vehicles segment.

On the struggling Tata Corus, Tata said the company needed to look beyond Europe and the US and focus on emerging markets. Tata admitted the $12-billion deal to acquire Anglo-Dutch steel maker Corus was "expensive". He hoped that the company would turn around soon. "It was expensive...We were only a five-million-tonne company in India…this gave us about 20 million tonnes. So, it was a high price, but not a price that would do what the economic situation did to us, which is unfortunate."

"I think there are many things Corus probably needs to do. It has been a traditional Europe-facing and US-facing company. While the US has been coming out of recession, Europe is still flat or down. I think the company needs to look at different markets, including emerging markets, as a market for its products," Tata said.

Tata declined to comment on speculation by global brokerages that Tata Steel should either sell a part of or the entire company. "I have been away from that situation for nine months. I wouldn't like to comment."

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