Tata's Nano, the World's Cheapest Car, Is Sputtering

The old adage says a person can’t be too rich or too thin. Given Tata Motors’ disappointing experience with the Nano, the $2,000 compact it introduced with great fanfare in 2008, it’s clear a car can be too cheap—at least for consumers who don’t want to be associated with a low-end ride. Ratan Tata, then chairman of parent Tata Group, made headlines a decade ago when he ordered up a “people’s car” that would appeal to Indian families who previously could only afford to travel by scooter. But Tata Motors has sold just 229,157 Nanos since deliveries began in 2009, and sales in March were off by 86 percent from a year earlier.

Tata Managing Director Karl Slym insists the company won’t kill the tiny, egg-shaped car. It will soon add improvements to breathe new life into the model, a move that would ultimately bring its price closer to those of rivals. The Nano’s marketing “didn’t jell with anybody,” Slym says. Scooter drivers weren’t attracted because others “don’t think I’m buying a car, they think I’m buying something between a two-wheeler and a car. Anyone who had a car didn’t want to buy it, because it was supposed to be a two-wheeler replacement.”