Sucheta Dalal :On-road price of the Tata Nano may touch Rs2 lakh
Sucheta Dalal

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On-road price of the Tata Nano may touch Rs2 lakh   

January 8, 2010

Tata Motors’ ambitious ‘lakhtakia’ car, the Nano priced at Rs1 lakh—excluding taxes and duties—is in fact costing customers nearly Rs2 lakh. According to both new and used car dealers, when you include registration, taxes, insurance and the total value of instalments to repay the loan, the real cost of even the basic version of the Tata Nano goes up to Rs2 lakh.


“People had booked the car under the perception that the vehicle will cost only Rs1 lakh. But it comes to more than that or nearly Rs2 lakh, when all things (additional expenses) are considered,” a car dealer said.


Tata Nano comes in four different variants, namely Nano, Nano CX, Nano CX-Metallic and Nano LX. Including registration and insurance charges, the Nano’s on-road cost comes to Rs1.53 lakh, Nano CX costs Rs1.81 lakh, Nano CX-Metallic costs Rs1.85 lakh and the Nano LX comes at a cost of Rs2.09 lakh.

Nearly 70% of the total bookings for the Nano have been done through bank loans. So when you add the interest component into the on-road cost of the basic version, it goes up to nearly Rs2 lakh. Prospective buyers had taken a loan ranging from Rs90,000 to Rs1.40 lakh—depending on the version of the Nano that they had booked—which attracts an interest of 10%-12% per annum.


Again, the fact that customers have to pay the interest first and then posses the car has not been well received by many prospective Nano buyers, car dealers said.


Most dealers said that customers did not like the fact that the price of the car was much higher than what they had initially expected, as the vehicle had always been touted as a Rs1-lakh automobile.


“They (Tata Motors) advertised the price of the Nano at Rs1 lakh, so everyone believed that they would get the car within that amount. However, that is not the case. Even the bare minimum or basic version of the Nano has an on-road cost of Rs1.35 lakh,” added a dealer. Also, since the Nano has a minimal resale value, potential customers are thinking twice before buying the vehicle, he added.


Last year in August, Moneylife had published news items regarding Nano cancellations from prospective buyers due to the delay of the actual car delivery date coupled with higher interest rates being charged by various banks.


However, according to media reports, Tata Motors managing director Prakash M Telang had said that cancellations are not very large in numbers and a few cancellations “here and there” were normal. According to reports, he said that the company was doing its best to ramp up and start production at its Sanand-based plant.


If at all you have to spend nearly Rs2 lakh for a small car, then why not go for something that can offer more features, asked a dealer. He said, “If you intend to spend Rs2 lakh on a car, then go for any second-hand Santro or Zen.”

Aaron Rodrigues


-- Sucheta Dalal