Tata Motors Considers Expanding Nano Sales Into Asia This Year, Chief Says

Tata Motors Ltd. may expand sales of the Nano, the world’s cheapest car, to countries such as Thailand, Sri Lanka and Bangladesh as early as this year as demand for the egg-shaped vehicle rebounds in India.

“We will go after these markets one after another,” Tata Chief Executive Officer Carl-Peter Forster said yesterday at an auto-industry event in Bochum, Germany. “The Nano is a raw diamond that needs polishing.”

Nano sales are likely to climb to 8,000 to 10,000 cars a month “soon” from a current rate of 6,000 to 7,000 deliveries as the Mumbai-based automaker expands marketing for the model and continues to offer 100 percent financing to customers who can’t afford a down payment, Forster said.

The Nano’s registrations in December rose to 5,784 cars from a record low of 509 in November, Tata Motors said on Jan. 1. The manufacturer has more than doubled warranties and offered easier financing to promote the model. The December tally, a 60 percent increase from a year earlier, was below the 9,000-car monthly sales record reached in July.

Tata delivered the Nano to its first customer in July 2009. The car, which costs as little as 137,555 rupees ($3,000) in New Delhi, went on sale in India nationwide on Jan. 3 through Tata’s 874 dealerships. Deliveries had been limited to 12 states as the company worked through initial orders and ramped up production at a new factory that opened in June with annual capacity to build 250,000 of the car.

Maintenance Packages

Tata Motors fell 3.8 percent to 1,150.3 rupees at the 3:30 p.m. close in Mumbai trading. The shares gained 65 percent last year, the second-best performance on the benchmark Sensitive Index of the Bombay Stock Exchange.

The automaker is also offering maintenance packages, including one for 99 rupees a month, and inviting prospective customers to meetings with Nano owners to overcome the concerns of first-time car buyers.

The model’s sales fell on a month-on-month basis from July through November because of price increases and safety concerns following reports of at least three fires with the model. In response to the drop, Tata began a television advertising campaign and added sales points in smaller towns in December, the same month it lengthened warranties to four years or 60,000 kilometers (37,300 miles) and introduced the maintenance plan.

The carmaker said in November that it would retrofit Nanos with additional protection in exhaust and electrical systems after the fires. Investigations concluded that reasons for the fires were “specific” to the vehicles involved, Tata Motors has said.

To contact the reporters on this story: Chris Reiter in Bochum, Germany at creiter2@bloomberg.net; Siddharth Philip in Mumbai at sphilip3@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

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