Nano's a no-no as image goes up in flames

INDIANS aren't rushing to buy the cars, partly because they explode.

INDIANS aren't rushing to buy the cars, partly because they explode.

IT was meant to be the people's car, an ultra-affordable vehicle that would lure the Indian middle classes away from motorcycles.

There is only one problem: the subcontinent's motorists appear to be completely unimpressed by the pound stg. 1400 ($2300) Tata Nano, the world's cheapest runabout.

Sales are plummeting after never really taking off, figures released by Tata, the manufacturer, which owns Jaguar Land Rover, have revealed.

The company sold only 509 of the snub-nosed hatchbacks last month, 85 per cent lower than for the same period a year earlier. Sales have fallen for four successive months from a high of 9000 cars in July. The decline marks an astonishing U-turn for a model that analysts had tipped to have the same kind of impact as Ford's Model T.

The 33bhp, two-cylinder Nano was hailed as revolutionary when unveiled at the Delhi Motor Show in 2008. Its "no-frills" design would usher in an era of frugal engineering, industry pundits said. As the Nano became emblematic of India's efforts to rival the manufacturing might of China, rival car companies around the globe scrambled to produce similar designs.

Amid the hype Ratan Tata, the Tata boss who devised the Nano concept, said he believed that the car was capable of eventually achieving annual sales of 1 million a year in India and suggested that an upgraded model could be sold to British buyers. The subsequent lack of enthusiasm may owe something to a series of sensational reports of several Nanos spontaneously catching fire.

Sunil Kumar Panwanda, whose Nano burst into flames in Delhi last year, described how his daughter had parked it outside his home, only to find it in flames three hours later.

"I had bought the car for my children and they are now terrified of driving it," he said.

Tata initially denied that the car was faulty but recently offered buyers an optional upgrade to the exhaust and electrical systems. There are suggestions now that the Nano may carry a long-term stigma, while expensive credit and disruptions to manufacturing have also tempered demand.

"Quality perception over safety could be a concern," Fortune Equity Brokers analyst Mahantesh Sabarad said. Any further fall in sales could tarnish the Nano brand, he added.

A spokesman for Tata said the latest poor sales figures, which count the number of cars sold to dealerships, were not a matter for concern. The company was working on selling Nanos directly to consumers, he said, but would not say how many cars had been sold in that way. Tata was also in the process of making the Nano available to buyers in rural India, where sales would pick up, he predicted. "One month's figures don't matter to us," he said.

The Nano has been beset with problems since its inception.

Two years after its launch, only about 70,000 have been built, a fraction of the output initially planned.

The paucity of supply was originally a result of a dispute with farmers in West Bengal over the purchase of land on which Tata was building a factory.

The row reflects the social tensions that India faces as it tries to increase industrial capacity.

The company was forced to abandon the original factory site at a cost of as much as pound stg. 224 million.

News of flagging Nano sales will not disappoint everybody. Environmentalists said that the last thing India's gridlocked cities needed was more traffic.

The Times