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Sunday, July 20, 2008

Will Tata Nano be Profitable?

The blogs are hot with discussion about the production costs of the new Tata Nano. The Nano is slated to be the cheapest production vehicle on the market today at a price of only 100,000 INR(~$2500). Rumors have arisen about the rising production price of the vehicle and its profitability.



Here is a profile of the vehicle:

Vehicle Class: 4-Door Light City
Engine: Rear 2 cylinder 623 cc
Drive: Rear
Transmission: 4 gear manual syncromesh
Weight: 1300 lbs (curb)
Fuel Capacity: 4 Gallons
Fuel Efficiency:~70 mpg

Here is a profile of the company:
NYSE ADR TTM


The production costs are rising due to Indian inflation and rising materials costs, what is your verdict on this car?

11 comments:

Anonymous said...

It will be a success because in India we need small cars.

Anonymous said...

looks good

Sanjay Krishnan said...

Will their costs outweigh the benefits?

Anonymous said...

Indian companies have a large bureaucracy that will add overhead costs

MasterSpeculator said...

This car is such a joke.
What do you mean you need small cars?
1st India needs to get rid of dumb autos and bikes that a step to traffic control and east infrastructure planning.

j e marcus said...

if this car was released in the US for those prices i would buy that SHIZA

Sanjay Krishnan said...

UPDATE:
Ok, I found out information on this car from a person who worked in the Indian auto industry for his whole career. The point of this car is not to turn a quick profit but rather a prototype/ proof of concept for future cars for emerging markets and congested cities. Many big suppliers have teamed up with Tata to make this car possible and they are all fully aware that this car may not be very profitable. Interestingly enough, parts of this car were designed in the USA.

MasterSpeculator said...

All right I see.
But, how would that help the company?
I see the idea just get the idea before other companies do.

I think the push for a proof of concept in India is untimely.

Anonymous said...

Tata is a very well reputed company,they will not do such foolish thing if it was bad

MasterSpeculator said...

Ok then.
Tata doesn't have money to throw around like this.

MasterSpeculator said...

Ok then.
Tata doesn't have money to throw around like this.