Nano tanks up for road test challenge

New Delhi, March 23: Capping a journey full of admiration but not bereft of controversies, the Tata Nano is all set to steer India into automotive history. Tata Nano is all set to launch today.
The small yet innovative car, revered for its tag of being the worlds cheapest, is ready to fuel up, promising an affordable and comfortable vehicle to millions of Indians for whom a car was far out of reach.

The evolution of the snub-nosed, 4-seater 623cc rear engine car an idea and dream project of Tata group chairman Ratan Tata is considered as revolutionary as Fords Model T, Volkswagens Beetle and the British Motor Corps Mini, all of whom went on to rewrite automotive history. But as it gears up for its much-awaited launch on Monday, the car also stares at one of its stiffest challenges delivering on promises.

With Nano, Tata redefined frugal engineering for global automakers when it promised to bring out the car for as low as Rs 1 lakh, below $2,000 at current exchange rates. Many automakers, though dumbfounded by Tatas budget price, questioned the veracity of the project and said it would not be able to meet the stiff safety and emission norms of today. But at its unveiling at the Auto Expo last year, Tata proved them wrong, reiterating that the Nano would not only meet the safety and emission norms prescribed in India but also in other developed countries, where it would be sold in the coming years.

But the journey to Nanos launch which has been delayed by at least six months has not been an easy one neither for Tata Motors nor for Ratan Tata. The project got mired in a political controversy in West Bengal, where Mamata Banerjee-led Trinamul Congress spearheaded an agitation against the land given for the cars factory at Singur. After lingering for long, the issue reached a flashpoint and saw the Tatas withdrawing from the state late last year, only to head to Sanand in Gujarat, where production will take at least one year to start.

Tata Motors will now launch the Nano, but with limited production capacity that is believed to be only around 50,000-60,000 units in the first year (from makeshift assembly lines at its existing plants). This will make it a slow beginning for a blockbuster product where demand far outstrips supply. The Gujarat plant will see the company go full-out in production as it will churn out 2.5 lakh units annually.

Controversies apart, the Nano is also seen as a lifeline for the ailing Tata Motors, which saw its first loss in seven years in the December 08 quarter. Hit hard by a slowdown in demand for commercial vehicles and its cars, the company is in deep financial trouble. This comes at a time when the company has to refinance the remaining $2 billion of a $3 billion loan it took to buy the Jaguar and Land Rover brands from Ford Motor Co in June last year. Thus, performance of the Nanoand its success or failure would be crucial for the financial health of Tata Motors.

Domestic market apart, Tata Motors also plans to take the car global as it recently unveiled the Nano Europa in Geneva, which is a slightly more robust version of the Indian model, and would be on sale in Europe in 2011.