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Sri Lanka Equity Forum » Stock Market & Forum Help » Tata takes Nano car abroad, with Sri Lanka first

Tata takes Nano car abroad, with Sri Lanka first

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Associate Director - Equity Analytics
Associate Director - Equity Analytics
Tata takes Nano car abroad, with Sri Lanka first
May 29, 2011 (AFP) - India's Tata Nano, billed as the world's cheapest car, began its first export sales Sunday by entering the Sri Lankan market -- but with a price tag nearly three times what it is at home.

The cheapest no-frills Nano costs 925,000 rupees ($8,486) in Sri Lanka, compared to about $3,000 for a basic model in India.
"We have started accepting bookings from today for the first 500 cars imported to Sri Lanka," an official of Dimo, the Colombo agent for Tata, said Sunday.

He said the price in Sri Lanka was due to high import duties and local sales taxes.

The Tata Nano generated worldwide interest when it was launched in 2008, and the company said that plans for international sales were now in place.

"We have already formulated plans for its introduction in several countries, to be implemented over the next few years," P.M. Telang, Tata's managing director, said in a statement.

Sri Lanka reduced car duties by almost half in June last year, but then raised taxes in April to stem a flood of car imports.
When the Nano was launched it was expected to create a vast new market segment in India, a nation of 1.2 billion people, but reality has fallen short of the hopes.

Analysts attributed the Nano's low sales to concerns over safety, lack of cheap financing and operational hiccups after production shifted to a new plant.

Last year, Tata was forced to offer free safety upgrades after around half a dozen of the cars caught fire.


Associate Director - Equity Analytics
Associate Director - Equity Analytics
Sri Lankan auto distributor Diesel and Motor Engineering Limited (DIMO) will capitalise on the launch of the Tata Nano to capture the number one spot in the passenger vehicle market, said a senior official.

"With the Nano, before 10 years we will be the leader in the passenger vehicle sector," said Ranjith Pandithage, chief executive and managing director of DIMO, agents for Tata Motors of India, German luxury brand Mercedes-Benz, and Chrystler Motors of America.

Tata holds a 60 percent share of the Sri Lankan commercial vehicle market and 42 percent overall market share.

"We dominate the market in the commercial vehicle sector," said Pandithage.

While over 100,000 Nanos have been sold since its launch in 2009 in India, its home market, Sri Lanka became the first export market for the Nano with its recent launch in the country.

"Sri Lanka is our first and most important export market," said Carl-Peter Forster, managing director and group chief executive of Tata Motors.

Tata has also signalled plans to launch the Nano in markets such as Indonesia and Thailand where it hopes to have a long term presence.

The Nano is marketed as a cleverly engineered passenger vehicle appealing to the cost conscious consumer.

"The Nano offer very low operating cost to the user," said Forster.

"With the economy flourishing there will be more need for commercial and passenger vehicles."

The Nano offers 23.6km per liter in fuel efficiency, certified by the Automotive Research Association of India under mandated test conditions.

The car is priced at 925,000 rupees for the standard model including import duties of 110 percent on CIF or landing cost, the Tata Nano CX at 999,000, and Tata Nano LX version at 1.1 million rupees.

An initial batch of 500 units of the Nano have been shipped to Sri Lanka and are open for bookings.

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