BARACK OBAMA, visiting India, gushed on November 7th about its “wonder car”, the Nano. Launched last year by Tata Motors, it has been widely lauded as a symbol of frugal innovation. Simple, small and fuel-efficient, the world’s cheapest car at “one lakh” (100,000 rupees, roughly $2,250, before tax) was supposed to allow millions of aspiring Indian families to swap their overloaded motorbikes for compact, air-conditioned four-wheelers.
However, so far few drivers are buying it. October, before the festival of Diwali, is reckoned to be an auspicious time to get a family motor, and last month car sales in India rose by 38% compared with a year earlier. But only 3,065 Nanos were sold, a paltry 2% rise on the year before (and well down on September), with cumulative sales for the year reaching just 40,467.
One reason is that the new car is tricky to find: it is being marketed only in a few parts of India, as Tata struggles to get a new factory up to speed, which in time should churn out 100,000 cars a year. More troubling, dealers report a lack of demand. Some drivers have been put off by price rises: including tax, it is now more like a one-and-a-half-lakh car. Others were deterred by a few early cases of Nanos billowing smoke and flames: Tata is offering to fix this with a free “upgrade”. It is also said to be easier to find spares for already ubiquitous Suzukis.
The micro-sales will make little difference for now to the parent company: Tata’s other models are doing well, as is its big foreign acquisition, Jaguar Land Rover. And the Nano could yet take off. But the sluggish start has given rivals, including Italy’s Piaggio, time to push on with micro-cars of their own.