World's cheapest car the Tata Nano is in the headlines for quite some time now. Nano has been the centre of action between the Tata Son's ousted Chairman Cyrus Mistry and new interim Chairman Ratan Tata.
Well, that was all about the managerial matters of Tata Motors. Now coming to the car itself, the state in which the Nano is right now, it is not expected to survive after 2019 as the country will adopt strict safety norms and crash-test norms.
The Indian government has made it mandatory for all the current car models to adhere to new crash-test norms and the cars should be equipped with airbags and ABS from October 2019.
Newly manufactured cars should meet the new crash test criteria by October 2017, airbags and ABS are a must from October 2018 for newly manufactured vehicles.
Coming to the Tata Nano, the mini car has to be re-engineered and will need a significant amount of investments if at all the car has to meet the new regulations.
Well, all these changes can be made to the car but it will be a billion dollar question whether it is worth the try as the Nano is already a loss-making product for Tata Motors.
Any additional investments to the car will directly shoot up the price and the car that is already in loss will create more problems for the company. Cyrus Mistry had mentioned that the Nano was losing money at around Rs 1,000 crore.
The Nano was launched in 2009 and the car was always under pressure because of lack of profitable sales figure. The mini offering from Tata Motors also saw multiple launches.
The latest re-launch was in 2015. From the sales figure of 74,000 units in the financial year 2012, the sales of Nano plummeted to just 21,000 units in the financial year 2016 and it continues to make loss.
With the entry of new products like Renault Kwid and Nissan redi-Go to the Indian market the condition of Nano worsened in the market. Currently, the Nano is priced in the range of Rs 2.19 to Rs 3.15 lakh ex-showroom.
The nearest competitor to Nano in terms of price is the Nissan redi-Go, which is priced in the range of Rs 3.37 to Rs 3.49 lakh and is offered with an airbag. The Nano draws power from a 600cc engine while the other entry-level cars are powered by an 800cc engine.
It is believed that Tata Motors is working on a new-generation Nano which will sort out these safety concerns and other mandatory rules. It may replace the current Nano. The company has also stated that it will be phasing out certain vehicles without revealing further details.