Return all confidential papers: Tata Sons to Mistry
After accusing former chairman Cyrus Mistry of breaching confidentiality rules, Tata Sons on Thursday asked the ousted chairman to return…
From being hailed the cheapest car in the world to becoming a key factor in the controversies presently convulsing the celebrated Tata brand, that is the seeming downswing in the fortunes of one of Ratan Tata’s pet projects — the Nano.
While there is no indication of production of the car being scrapped — indeed the “buzz” is that an electric version is being experimented with — that both Cyrus Mistry and Nusli Wadia have slammed the car as a drain on the resources of the industrial conglomerate does point to a cloud over its future. There being little or no advertising for the car is another negative index.
Sales are reportedly dwindling: while capacities were created for mass production, the low volume of sales has meant the plant operating at less than 30 per cent. “After its commercial failure which became evident not too long after its launch, I differed strongly in its continued operations and funding. Huge losses have been incurred over the years.
The delay in the closure of the Nano is a serious drain on the finances of the company”, Mr Wadia said in a communication to shareholders ahead of a crucial meeting. Mr Tata’s response was not immediately known — those loyal to the Tata brand insist that the balance-sheet was never the sole priority of the group.
Has the Nano proved something of an anachronism? It entered the market when production of the initial “cheap” Indian car, the Maruti 800, was being wound down. At that time Maruti-Suzuki and Hyundai were favouring slightly more “upmarket” models, and that trend has persisted. It would suggest that people are no longer for a low-priced car, and are seeking advanced features and capabilities.
And given the obsession with social status the emphasis on “world’s cheapest” (a term used by Barack Obama, among others) might have had an adverse impact — after all owning the “world’s cheapest” might be seen as pointing to a limited-income, a label which few Indians would like applied to themselves. So an original virtue has since been reduced to a detractor.
Funny though, that the relatively few people who own a car highly suited to congested urban roads have no complaints about its performance. Will the return of Mr Ratan Tata to the helm revive the Nano nocturne?
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