Tata Nano: One lakh price Tag not for Long

A promise is a promise remember Ratan Tata's words at the Auto expo 2008 during the Tata Nano launch.Keeping in line with this the Tata Nano may very well be launched with a factory price of one lakh but for a very short period.So anybody who does want to benefit of the price tag may have to pull a string or two to get the car during that period with the introductory pricing.

Why do I say so.Rising steel prices have meant suppliers to Tata are no longer able to keep their costs down to initial estimates.Remember steel is a major component of the car[about 15-20%].Although Tata has set up a special team to keep prices in check there is only so much that they can do.

Almost all suppliers[including the likes of Sona Koya and Minda] are pressurizing Tata to increase prices.Already margins expected from the Nano are very low and if prices of raw materials continue the same trend then Tata would actually be paying us to buy the car if prices are not increased.Something which is very unlikely,Tata too are a business house.Making the cheapest car in the world is philanthropy enough.Tata shall not make much money from selling the car in markets like.it is betting on the more developed markets where it may play the environment card as well by targeting the 100mpg figure and perhaps even use non-conventional fuels to power the Nano there.

Very unlikely that other manufacturers could match or better the price tag of the Nano and the Nano will remain the cheapest car available but the one lakh price tag now looks impossible even for Tata.

[Source:Business Standard]