Home / Business / Money / Chart of the day: Can self-drive rental restore Nano glory?

Chart of the day: Can self-drive rental restore Nano glory?

The News International Team

Tata Motors  has tied up with leading car rental service Carzonrent where customers will be able to rent the car for a full day for as little as Rs 399 per day or Rs 99 per hour on a self-drive basis.

“Through this partnership we will reach out to a larger customer base and give them an opportunity to experience the Nano in a self drive avatar,” Tata Motors Head Institutional Sales Deepankar Tiwari said.

Currently, the cheapest car that customers can rent on the website costs Rs 1,400 per day.

The move is the latest by Tata to shore up fortunes of its entry-level car, which started off with a bang, notching up sales of about 10,000 units a month soon after its late 2009 launch, but which has now fallen out of favour with buyers.

The Nano, billed at launch as the world’s cheapest cars, has witnessed its fortunes dip after a series of fire-related incidents took a toll on buyers’ perception of its safety and quality aspects.

In 2010, the Nano sold about 60,000 units (average: 5,000 units a month), which went up to 71,000 (6,000 a month) and 77,000 units (6,500) in 2011 and 2012.

But its sales nosedived in 2013 (it sold all of 18,500 units a year), with monthly sales hitting a low of a mere 550 units in December last year. In contrast, Tata’s Sanand plant in Gujarat has the capacity of producing 25,000 Nanos a month.

A brainchild of Ratan Tata, the car was launched with the intention of luring two-wheeler users into upgrading to it but the script has gone awry along the way.

In fact, to counter falling sales, Tata Motors has given the car a lot of upgrades — such as launching a CNG version in October 2013 and an all-new variant Twist in January this year – and launched customer-friendly initiatives such as the option of buying the car online or via the credit card. Early on, Tata had made the Nano available through retail outlets such as Big Bazaar.

But Tata’s efforts, as well as a proactive marketing strategy to shift the car away from being positioned as a ‘cheap car’ to be seen as a ‘city car’, does not seem to have helped.

Further, Tata plans to introduce the Nano in a diesel as well as with a semi-automatic gearbox (AMT) seen on Maruti Celerio.

The chart below captures the Nano’s sales since 2010, while highlighting major events in the car’s life.

Tata Motors stock price

On October 09, 2014, Tata Motors closed at Rs 519.95, up Rs 9.95, or 1.95 percent. The 52-week high of the share was Rs 544.50 and the 52-week low was Rs 331.05.

The company’s trailing 12-month (TTM) EPS was at Rs 0.08 per share as per the quarter ended June 2014. The stock’s price-to-earnings (P/E) ratio was 6499.38. The latest book value of the company is Rs 59.58 per share. At current value, the price-to-book value of the company is 8.73.


Check Also

Rupee recovers 6 paise to 67.01

The rupee today recovered some lost ground by rising 6 paise to ...

Notes ban to have positive impact on economy

NEW DELHI: The government’s demonetisation move has led to widespread adoption of ...