India-based Tata Motors Ltd (TTM) has decided to start exporting its Nano minicars to Indonesia, Thailand, Sri Lanka and Africa by December this year with an objective to boost its sales and in turn reducing its dependency on the domestic market.
However, Tata Motors has been exporting many other models, particularly trucks and buses to more than 30 countries and cars and sport-utility vehicles to 16 countries.
In the first phase only 1,000 nano cars will be exported to the selected regions as stated above. According to the company, these destinations have been initially chosen based on the fact that these markets are almost similar to the Indian market having identical tastes, preferences and requirements.
Thus the existing Nano models hardly require any major modification before being exported. Successful export in these regions will provide sufficient incentive to Tata Motors to venture into the western markets where safety and emission standards are very stringent.
Moreover, the company’s aim to expand its business further will be fulfilled on the back of huge demand for India-made cars and motorcycles in the developing markets of Southeast Asia and Africa because of their lower prices and higher fuel-efficiency. The oval-shaped Nano, which is powered by a 624-cubic centimeter gasoline engine, costs INR 137,555 ($3,043 approximately) for the base model at showrooms in New Delhi.
Thirdly, Tata Motors aims to achieve sufficient margins from its Nano cars which presently earn minimal margins in India. Vehicles sold in the overseas market normally fetch comparatively higher margins than those sold in India.
Moreover, Tata Motors wants to reach the break-even profit point as soon as possible, where it has invested INR 20 billion ($442 million) for building a whole new factory in Gujarat dedicated to Nano.
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