Tata Nano hits the streets of India

The long awaited Tata Nano hit the streets of India on Thursday with the company and dealers around India confident of strong demand in light of the global economic crisis which has hit the auto industry especially hard.


With a sticker price of 100,000 rupee's ($2000) the Nano is by far the cheapest car in the world. Despite this tempting price, a major concern in many investors minds must have been how India's consumers would be able to secure loans or if they would even be willing to take out a loans for a car in such volatile economic times.

Thankfully the Tata Motors Finance (TMF), the financing arm of Tata Motors, today announced the launch of an attractive loan program which include no upper limit on the number of cars to be booked through TMF, once the customers have submitted the forms a booking amount would be made to Tata Motors on behalf of the customers, applicants who have been allotted the car do not loose any amount except cost of the booking form and initial payments.

To facilitate the booking process, multiple touch-points have been created all over the country. As part of the arrangement, TMF will be assisted by Tata Capital Limited, E-nxt Limited, Tata Motor dealers, Tata Securities outlets and all channel partners – DSAs & Vendors to ensure wider distribution. The booking scheme offered by TMF will enable a customer to book the Nano by paying an amount starting Rs 3,199/- only for the base model.

All in all, there's high hopes for the Nanao which Tata Motors chairman Ratan Tata has said will "create a safe, affordable, all-weather form of transport for Indian families. Families of four -- and more -- are regularly seen balancing precariously on motorcycles weaving through the country's notoriously lethal congested traffic."


Here are some articles about the Nano launch

World's cheapest car goes on sale in India - AFP
Tata Nano Goes on Sale - Wall Street Journal
Tata Motors' special scheme for Nano - The Business Standard
Q+A: Bookings open for Tata's Nano, world's cheapest car - Reuters UK

Analysis: Tata Motors Launches the Tata Nano -- $2000 car

Tata Motors, one of my favorite emerging market companies for a variety of reasons, released it's long awaited Tata Nano today. The car is priced at a very affordable $2000 usd or 100,000 rupees.

Already being deemed "The People's Car," Tata Motors has high hopes for it's Nano. Tata Motors recently financed the purchase of Land Rover and Jaguar with debt and has bonds coming due this summer. Tata Motors also recently lost a great deal of money after having to abandon it's original factory it built for assembling Nano's because of local protests.

These two problems highlight the Tata's dire need to generate some cash. The Nano will hopefully help. The Indian government has also recently pledged to help certain state banks in some regions by offering subsidized loans to them if they make car loans to people looking to purchase a Tata vehicle.

Despite seeing it's stock plummet in value over the past 8 months, Tata Motors still offers a very attractive dividend of 7.8%. Yes the company is straddled with debt after its recent acquisition, but it does have a solid cash flow coming into from a relatively still well preforming market... a.k.a, India (at least when compared with other areas in the global economy).

Furthermore, there is a great deal of back logged demand for transportation in India. As the central government attempts to stimulate growth by expandinginfrastructure, Tata Motors will be a clear winner.

At the moment avg travel speeds on Indian roads are horrendous. Tata Motors can also take advantage of this because even though the specs of the Nano (see this Reuters article) are a bit lacking, there is no need to travel with a V-8 engine in India when you can rarely, if ever take your car above 30 miles per hour.

Increases in infrastructure spending will spur demand for cars and thanks to such the incredible growth of India and the increasing number of vehicles hitting the market every year will make the Nano very appealing in the years to come for new drivers hoping to get their hands on their first car in India.

On a side note, Tata Motors aquisiton of Land Rover and Jaguar may have come at a very bad time in the auto industry, but they no less did adquire two luxury car brands. This will give them the ability to one day penatrate western markets with greater ease and higher quality products.

There's already news Tata Motors plans to bring the Nano to the United States in 3 years time. If you don't believe me, check out this Reuters article from Today.

"I believe within the next three or so years we could develop a version of the Nano with options the U.S. market might want to have," said Ratan Tata, Tata Motors chairman."

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Time to Buy??? Yes maybe you missed the Nano launch bump, but long term this is looking rather tempting... (Tata Motors: TTM)

The Tata Nano