What’s the mystery behind these 'dumped' Tata Nanos?
January 7, 2010
Last year in July, everyone was impressed with the successful launch of the Rs1-lakh car 'Nano' by Tata Motors. Tata Nano, better known as the ‘people’s car’ or the ‘Lakhtakia’ was a huge hit among the middle class, with almost 2,03,703 people going in for the advance booking route.
However, there seems to be a paradigm shift in the perception about the Nano for both the common people and the company. On Sunday, 3 January 2010, I came across a number of Tata Nanos, literally in a dumped condition at Kalyan. The images were clicked by me near Tisgaon Naka, Pune Link Road, Kalyan (East). Looking at the condition of these ‘brand-new’ vehicles, I felt pity for the common man and his dream of owning the 'Lakhtakia' car.
We sent a few mails to Tata Motors officials on Monday, 4th January, but we are still waiting for an acknowledgement or reply to our query about the Nanos 'dumped' in Kalyan.
Last year in August, Moneylife published news items regarding Nano cancellations. This was largely because prospective Nano customers seem deterred by the huge gap of the actual car delivery date coupled with higher interest rates charged by the banks.
At that time, Tata Motors shortlisted 1,00,000 owners through a computerised random selection process. The company had claimed that the cars were ‘price-protected’ and people will get their dream vehicles at ‘ex-showroom price’.
However, many among these 1,00,000 selected owners and 55,021 in the waitlist were seen pulling out of the deal. The spate of withdrawals has taken everybody by surprise, although Tata Motors had pledged to shell out an interest of 8.5% on the booking amount to the waitlisted customers on the terms that the car would be delivered within two years from the date of allotment (23 June 2009) or will pay 8.75% interest if the car is delivered after two years from the date of allotment.
The fact that the customers need to pay interest first and enjoy the car ride later did not go down well with many prospective Nano buyers. Around 70% of Nano bookings were made through bank loans, with interest rates varying between 10% and 12% on a booking amount of Rs90,000 to Rs1,40,000.
For example, a borrower who had opted for a loan of Rs1,20,000 for a three-year period will be forced to shell out a monthly instalment of Rs4,000, when he is getting his dream car only after two years.
Though extended delivery time is the key reason, a few from the 1,00,000 shortlisted customers have also opted to cancel their bookings. Besides banks, some Tata Motors dealers also have confirmed their cancellations. "There are several cancellations, but they are at Tata's end," said one Mumbai-based dealer. Company officials were tight-lipped on the issue.
Nearly 1,00,000 people who were certain to receive the low-cost car will now get it by the last quarter of 2010.