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Tata hikes Nano price, to begin second phase of delivery

Tata hikes Nano price, to begin second phase of delivery
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First Published: Fri, Jul 16 2010. 09 53 PM IST
Updated: Fri, Jul 16 2010. 09 53 PM IST
Mumbai: Tata Motors Ltd, the country’s third-largest carmaker by volume, will begin the second phase of deliveries for its ultra small car Nano on 17 July, but with a higher price tag.
It is increasing the price of the Rs1 lakh car—acclaimed for being the world’s cheapest car—by 3% to 4%, the company said in a statement on Friday.
The hike will apply even to those who had booked the car at its launch more than a year ago.
Currently, the cheapest of Nano’s three variants costs Rs1.53 lakh in Mumbai, including taxes.
The new batch of deliveries has been made possible by its factory in Sanand in Gujarat, which has an annual capacity for 250,000 cars and became operational ahead of schedule, the company said.
Tata Motors launched the Nano on 23 March 2009 and received bookings for 260,000 cars. But because of production constraints, it decided to accept bookings and make deliveries of the cars in two phases. It chose its first 100,000 customers through a computerized draw of lots for who would get the car at an ex-showroom price of Rs1 lakh. The rest were given the choice of retaining or cancelling their bookings.
Tata Motors did not disclose the number of cancellations.
The company has, between July 2009 and June 2010, delivered at least 45,000 cars and is now contacting so-called retainees, or those who retained their bookings, about the impending deliveries. This is the final step before the company opens up sales of the Nano, it said. There were 55,000 retainees at the end of 2009.
The company has been paying an interest of 8.5% to such customers on their deposits, and will continue to do so until their cars are delivered.
Following the price hike, however, retainees will have to pay an additional 3% to 4%, depending on which variant they purchase.
shally.s@livemint.com
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First Published: Fri, Jul 16 2010. 09 53 PM IST