Tata Nano 800cc variant Coming soon: Will it succeed in the Entry-level car segment?

Business daily ET reported yesterday that Tata Nano is all set to resurrect its image from an ultra-low cost ‘People’s Car’ to a more powerful variant with an 800cc 3-cylinder engine to tap the entry-level segment in the four-wheeler car market.

This decision by Tatas to revolutionize the petit car comes with a number of caveats, and to allay down-market brand image of the vehicle in the light of various technical snags, including Nano going on fire on mid-roads, causing fear among the ultra-cheap car users.

Logically, the 800cc Nano is likely to increase the appeal of the small car with its more powerful engine and better pick-up to ride on the Indian roads, as compared to its current 624cc engine variant, which is one of the lowest by industry standards.

However, the powerful engine module would drive up costs for the Nano – leading to shift in its USP of being a cheap car to being pitted in competitive entry-level car segment, already crowded by the likes of Maruti Alto, Hyundai Eon and Chevrolet Spark. Most of these entry-level vehicles sport a tag of Rs.2.5 lakh at ex-showroom Delhi prices, and even Nano’s 800cc variant is likely to follow the suit.

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In my opinion, Tatas does not have any hot-selling car in the entry-level segment. They have a sensational brand in the form of ‘Indica’, but that falls above the entry-level segment, which can be termed as mid-level hatchback segment.

While, on the one hand, Tatas can boast of product-wise monopoly in the ultra-low cost car segment – with no other automobile maker present in the segment as yet; there has been a vacuum in the entry-level car segment for the Tatas since a long time now.

For long, Maruti has led the entry-level segment with its best-selling Maruti 800 model – which is now in a gradual phase-out mode; and continues its strong hold on the segment with its 800cc Alto and 1000cc-engine upgraded Alto K10 model.

However, what concerns me is why someone would buy an 800cc Nano when so many tried and tested four-wheeler alternatives are available in the entry-level segment. Probably, a Nano will always be a Nano with the accompanying imagery of a poor man’s car.

Rather, Tatas could have re-modeled a newly branded car in the 800cc engine, looking at the broad technical support and know-how that the company boasts of in the automobile sector.

Moreover, Tatas have already pushed the sales of its new Tata Nano 2012 model – tweaked with new design for seats and headrests, all-beige interior theme, rear-view mirrors on both sides, four new attractive shades and a more powerful ride with 37 bhp of power and 51 nm of torque.

In addition, with Nano being originally envisaged as a low-cost car, the management could have further driven its cause by turning the wheels of Nano to hybrid fuel technology alternatives, including a turning it into an low-cost electric vehicle, amidst screaming fuel prices.

What’s your view on Tata’s plan to venture into a more powerful 800cc Nano?