Tata Motors Experienced 14 Fall in 1st Quarter Sales

Global economic recession now seems to have started making its impact on fastest-growing Indian car market which is now struggling due to domestic economic crisis. Tata Motors, one of the leading auto makers in India, has seen 14 percent fall in its total sales in the first quarter. Tata sold 498,581 vehicles in the first three months of the year which is well below from 582,390 vehicles sold in the same period of last year. Tata has also seen 13% decrease in its domestic sales for March.

Well, Tata has recently launched its much-awaited 2,000-dollar Nano which is claimed to be the world’s cheapest car and Tata is keeping high hopes for the success of Tata Nano which is known as “The People’s Car”. Tata will start taking reservations for Nano from April 9. Though the company is expecting booming success of Tata Nano, some of the market analysts do not think Nano could turn Tata’s world around because Tata Nano will generate very small profit margin in the small car segment which is already packed with several vehicles from different companies. Moreover, Tata could sell maximum 50,000 Nano cars this year because the company can not increase production due to a heated dispute over land ownership leading to a shift of its production facility from West Bengal to Gujarat. So, the company can not roll out more Nano cars until its new production facility being set up in Gujarat.

It is now clear that Tata may not get a huge boost from Nano in the recent future and it would be interesting to see if Tata takes up any other policy to improve the condition in 2009.

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AFP