Tata Nano may lose its one-lakh tag

Tata Nano may lose its one-lakh tagWhile it was Ratan Tata's dream to launch small and affordable car for Indian consumers with a price tag of Rs. One lakh car was successful as the company launched it last year amid tremendous coverage from media agencies, the car may lose its price advantage. The small car will most probably lose the one-lakh tag soon as the second round of bookings open in the last quarter of the current year.

Attributing the rise in the price to the increasing cost and squeezing margins, Tata Motors has so far stood on its promise to deliver the first one lakh units on a price protected basis i. e. the product will be delivered to the consumer for Rs. one lakh irrespective of the rise in the raw material cost.

So far, the company has delivered 26,500 units of the Nano. Once the Sanand plant gets operational, Nano is expected to get in the groove as the volumes will increase significantly.

Analysts are expecting a rise of Rs. 20,000-30,000 in the cost of Nano after the second round opens for bookings. In fact, the competition will soon increase after Renault will launch its ultra low-cost car in alliance with Bajaj Auto. Market watchers say that Nano will always have an upper hand as first mover.