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Nano: Making the mini-car business in India bigger

By Motortrend India Staff   |   04 February,2008

Nano has got huge publicity from Indian as well as foreign media but will the same continue for the next two years? And even if it does, would the same work to Nano’s advantage? Such questions get valid answers after Nano finds competition in the market.

There are three such competitors for Nano in the making over the next couple of years. French carmaker Renault SA and its Japanese affiliate Nissan may come with one. Bajaj Auto has already unveiled their concept for a small car at the start of the Auto Expo in Delhi, of worth Rs. 1, 35,000. Hyundai that drove away with many car awards this year is also planning small car offerings for Indian roads.

Renault-Nissan CEO, Carlos Ghosn, has already pointed out at the World Economic Forum (WEF) in Switzerland that Renault and Nissan would launch a new car at the same price as the Nano. Though, Renault SA and Nissan were earlier planning a car of Rs.1, 35,000, they now want to roll-out the same for Rs.1, 20,000.

The high-end variants of Tata’s Nano would cost more than Renault-Nissan’s upcoming car. Car lovers may then prefer the French car over Nano. For Renault SA to bring down the price of their low-cost car by $450 is almost compulsory since the small car market needs to be tapped immediately. Ghosn also announced a tentative date for the launch; somewhere around early 2010.

French car makers are really impressed with the low-cost manufacturing methods employed in India. So much so that they have already impressed Renault SA enough to sign deals with Mahindra and Mahindra Ltd., Ashok Leyland Ltd. and Bajaj Auto for making small trucks and  cars.

Report from rating agency CRISIL says, Nano's launch would end up expanding the Indian car market by 65 percent as it will encourage other car makers to enter the small car market too over the next few years.

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