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A file photo of Tata Motors’ Nano cars.

Murali Gopalan

Mumbai, Oct. 7 Tata Motors is expected to produce around 40,000 Nanos this fiscal though numbers will increase four-fold to over 1.7 lakh units during 2010-11.

The company has been compelled to use the interim plant in Pantnagar, Uttarakhand, for a large part of this year where it is difficult to ramp up volumes. This is the facility where the Ace pickup is also produced.

It is only from December 2009 that monthly production at Pantnagar will be enhanced to 5,000 units (from nearly 4,000 in October and November) and will stay at this level for the whole of 2010-11.

Ancillary suppliers associated with the project told Business Line that the new plant at Sanand in Gujarat would start rolling out small numbers of the Nano in February 2010. This is expected to go up to 1,200 units in March.

“Effectively, there will be nearly 40,000 cars produced from the two plants this fiscal with Pantnagar accounting for a lion’s share. Sanand will come into its own from 2010-11,” sources said.

Hence, while numbers at Pantnagar will stay steady at 5,000 cars per month through 2010-11, output at Sanand will be gradually ramped up to 5,000 units in May and twice as much from September 2010. November, December and January will see this further increase to 12,000 cars, going up to 15,000 units in February and March 2011.

By the end of 2010-11, the annual output at Pantnagar has been targeted at 60,000 Nanos while at the Sanand plant it will be in the region of 1.1 lakh cars. Suppliers believe that the subsequent years could see Nano output go up even further though the half million unit mark could take a little time in coming.

The total number of bookings for the Nano was a little over two lakh and sources say it will be interesting to see how the demand cycle pans out as production numbers increase. “Word-of-mouth is imperative to spread the message and for the moment there are just not enough cars on the roads to create that sense of hysteria,” they add.

It is clear, therefore, that 2010-11 will be a critical year for the Nano in terms of building its brand and planning bigger numbers for the coming years. By the end of March 2011, there would be over two lakh cars on the roads, which will translate into greater visibility on the roads and generate demand for the future.

There is also no question that valuable time was lost in readying a new plant when a lot of work had gone into readying the original site at Singur, West Bengal. “It was also unfortunate that the global meltdown also began soon after, which put pressure on companies like Tata Motors to prioritise investments,” experts say.

The company is also believed to be working on a 684cc diesel version of the Nano, which is expected to debut during 2010-11. This could also play a key role in boosting volumes in the coming years given that compact car customers are increasingly going in for diesel options as evident in the waiting list for cars such as the Suzuki Swift.

The top-end Nano (petrol) has an ex-showroom Mumbai price of Rs 1.85 lakh and even if its to-be-launched diesel sibling is Rs 70,000 more, it will still be the most affordable diesel car in India. Sources say this version may end up being the big growth driver for the Nano and help Tata Motors reach production levels of 3.5 lakh units in the next two years.

More Stories on : Cars | Outlook | Tata Motors Ltd

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