Mumbai: Besides helping Tata Motors Ltd make inroads into the small car market, the Nano could also potentially be a lifesaver for UK-based Tata subsidiary Jaguar Land Rover (JLR) when it launches in Europe in 2011.
Called the Nano Europa, the car is expected to help JLR meet stringent new emission norms set by the European Union (EU) countries that come into force in 2012. The new norms have a maximum permissible limit of 120gm carbon dioxide (CO2) emission per km. Current emissions from Land Rover and Jaguar cars are higher.
A 28 March report from Deutsche Bank notes that since the calculation of CO2 emission is based on an average of the entire fleet, the introduction of the Nano in Europe could take some pressure off JLR. In the report, analysts Srinivas Rao, Amyn Pirani and Anup Kulkarni, wrote that “the Nano, which has CO2 emissions of only 101 gm/km, could be a boon for Jaguar Land Rover in Europe”.
Don Hume, director, corporate and government affairs, JLR, however, said in an email response “it is far too early to be considering what plans Tata may have for the Nano in Europe”.
Low volume, limited range car producers that produce less than 300,000 units annually, such as JLR, don’t require to meet the 2012 emission norms of 120gm/km, Hume pointed out. Instead, he said, the company has set a target of an overall CO2 reduction of 25% across its vehicle range.
He conceded that the target, which is higher than the 19% industry average, is challenging for JLR, which does not have as large a product portfolio as other European luxury car makers.
But given that the Nano Europa is still at the prototype stage, JLR is not depending entirely on it to meet the norms. “Jaguar Land Rover is in the middle of an £800 million (around Rs4,024 crore) investment programme to develop new environmental technologies,” Hume said. Some of these are beginning to appear in production vehicles and are expected to help the company achieve the 2012 target.
A spokesperson for Tata Motors said: “Jaguar Land Rover itself is already working hard to meet the specific CO2 emission targets it has been set for 2012. What may happen after that is not yet decided.”
Anumita Roy Choudhary, a researcher who tracks European emission norms at Centre for Science and Environment, said JLR’s ability to offset its emissions against the Nano Europa will depend on sales volumes. “The CO2 emissions are calculated on the basis of weighted average method. Hence to offset the emissions, Nano Europas have to outsell Jaguars and Land Rovers,” she said.
Luxembourg-based European Investment Bank, or EIB, announced last month that it was considering a loan to JLR for research and development and reduction of CO2 emissions from its future products.
Hume said JLR has not yet been offered any funding by the EIB as they are currently considering further applications, including one from Jaguar Land Rover for €300 million.