The Nano Effect:The people’s car is a game changer for the auto business (TOI Reports)

You’ve come a long way, Nano. With its formal launch, the “people’s car” is finally ready to rev. It’s been a rough ride though, from the time Ratan Tata spoke of making a low-cost car in 2003 and Nano’s showcasing at an auto expo in early 2008. Had all gone well, the world’s cheapest car would have rolled out from Singur, West Bengal, end-October 2008. But a land-related agitation subjected the project to unsavoury politicisation. Tata Motors moved Nano to Sanand in Gujarat and made interim production plans in Pantnagar, Uttarakhand. But with production schedules turning turtle, the future looked uncertain. With Nano now ready for bookings, the dogged pursuit of a business goal with a huge and positive social outreach is approaching fruition. 

Nano’s day out served as a mood enhancer not only in terms of lifting market sentiment, but also for crisis-hit automakers and consumers weighing the price tags of goods and services. The brand will revolutionise car ownership, wooing as it does a consumer segment with a big demand potential. Since its conceptualisation, Nano has represented a game changer for the auto trade, whether in terms of cost-efficient engineering, fuel efficiency or target buyers. Bajaj Auto is to roll out a rival in 2011, whose competitive edge on mileage will reportedly require a slightly higher price. Maruti, front runner in the compact car trade, is said to be waiting for Nano to make a splash before framing its business response. Firms like Hyundai, Toyota and Honda are gearing up to compete, with their own products. 

The Nano effect has been felt in the used car market, especially in the unorganised sector. Demand reportedly nosedived by 25-30 per cent in the days preceding Nano’s debut. Falling prices are expected to slide further for small car models made by Maruti or Hyundai once Nano hits the streets. All of this can’t but enthuse the aam aadmi in a nation where millions of two-wheeler drivers hope to graduate to four-wheel vehicles. If Nano reflects anything, it’s this aspirational facet of India’s domestic demand-driven economy. 

While the low-cost car’s popularisation is welcome, it must have the infrastructural support it needs. Most Indian city roads creak under the weight of vehicular traffic. Once the cheap car trend catches on, it would exacerbate the traffic congestion problem that’s become a countrywide urban nightmare. Plus there’s vehicular pollution. Making cars prohibitively expensive is a socially unacceptable solution to such issues in a democratic country where, by global standards, the number of cars per thousand persons is woefully small. Creation and upgrade of road infrastructure and user-friendly mass transport systems are the way ahead.

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