Tata Motors Limited (NYSE:TTM)’s “Nano” never says no
On Wednesday, Tata Motors Limited (NYSE:TTM) said that due to the sharp drop in Nano sales, it will be repositioning the low-budget car as a “smart city car”. The newer version will have some additional features like the CNG functionality and power steering. Cyrus P Mistry, the Tata Group Chairman said that the company is now focusing on improving and adding features as well as the perceived-value of the Nano with every new version launch.
New target market
He went on to say that the company will now be targeting younger customers and position the Nano as a smart city car. TTM had offered numerous freebies and discounts but had had been unsuccessful in attracting customers to the showrooms. The company’s Nano-dedicated plant in Gujarat, India has been operating way below 50% of its production capacity. Mistry said that the new Nano will sport enhanced interiors, power steering, better exteriors and better fuel-efficiency.
As per the latest Siam data, TTM’s market share in the passenger-car space dropped 8.9% in July from the 11.8% that it stood at, in March. Technically, this pushed it down to the 4th place. For commercial-vehicles, the company’s share dropped to 52.9% from the 56.1% that it stood at in the same period last year. In the April to June quarter, TTM’s standalone sales dipped by 14% from the same period a year earlier and pulled-down its annualized manufacturing-capacity utilization to a dismal 36.2% from the 47.6% that it stood at in the quarter that ended March 2013.
Moody’s warned of a credit rating for the company due to the steep sales volume and market share drop. Mistry said that the long-delayed CNG variant of the Nano will be launched this year. As far as the new products in the commercial space are concerned, the Prima range will have upgraded cabins, enhanced technologies and fuel-efficiency.