The smallest and cheapest car in town, the Tata Nano, is set to make in-roads into the rural and semi-urban parts of the country. Tata Motors has said that it is planning to launch 300 new dedicated sales outlets in 2011-12 to tap into the non-urban demand for the compact car.

Combined with the addition of new export markets such as Sri Lanka and Nepal, such a move is expected to help pick up sales for the Nano, which has seen intense fluctuation in the last few months.

Sales have halved to 5,451 units in the previous month of June, from its all-time peak of 10,012 units just two months ago in April.

“We feel that we need to be present at more places. We will add 300 new outlets this year in rural areas and smaller towns. At present, the Nano is sold through over 600 passenger vehicle outlets, while we have 200 more experience points,” a company spokesperson told Business Line .

The official added that the company has also set a certain target for export sales coming out of Nepal and Sri Lanka, but is not planning to add any more new export markets this year.

Sales dip

Previous highs in terms of sales for the Nano were seen in July, 2010 (9,000 units) and March, 2011 (8,707 units).

“We expect the sales to get normalised soon. Sales have fallen in the past two months as monsoon months generally see a dip. There has also been some resistance because of increasing fuel prices and interest rates, which has affected all of the industry,” the company official said.

Sanand to touch full output level

The urgent need to increase sales of the Nano stems from the fact that the automaker is also working towards touching full production levels of 2.5 lakh units a year at the Nano-only Sanand plant within this fiscal.

In April, a senior company official had said that Tata Motors is targeting to increase manufacturing capacity to 18,000-20,000 units a month in 2011-12, up from the present monthly output of 10,000-15,000 units.

Tata Motors has a lot riding on the success of the Nano. Touted as the cheapest car in the world when it was unveiled in 2008 at the Delhi Auto Expo, the car was expected to provide an affordable means of personal transport and an upgrade from two-wheelers for millions.

However, monthly sales after the launch in 2009 have been erratic. The company had mostly attributed this to lower production on the back of component supply shortages and a shift in manufacturing from the Pantnagar plant to Sanand.

> roudra.b@thehindu.co.in

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