Tata’s Nano is going to crowd tier II and III towns
by Atul Mathur
Tata’s Nano will be delivered in July in the current year. Experts predict that seeing the number of booking of the world’s cheapest car, Tata Nano, the II and III towns will be overcrowded by these small cars in india. In fact, the price tag has been set very low. However, it will take a long time to flood the market with these cheap cars. KPMG auto advisory manager Arun Krishnan said that Nano may create its own segment of customers while it seems that less posed to affect the A2 compact car market. A Nano car dealer in Tamil Nadu informed that most of the Nanos customers will have their very first car as it. They are mainly two wheeler owners. So in this way more car owners will emerge who add the list of car owners. There is no replacement kind of ternd. Before the launch of the small car Nano, credit rating agency CRISIL estimated Nano will expand the car market by 65% and the car sales in India would rise to 20% compared to the last fiscal. Another figures received by KPMG from the society of Indian automobile manufacturers (SIAM) and CRISIL indicates that in the year 1998-99 a number of carmakers step in the small car segment. Then Maruti 800 dominate the car market by covering 58% share with the samll car. Whereas when it launched A2 compact car models, Marutis’s 800 sales fell to 5.8%. The A2 models created a metro-based upwardly mobile market segment, Mr Krishnan said. Now the Tata’s strategy seems to be more realistic as the Nano price is fixed to less than three folds that of a two-wheeler. Clearly, there will be a great number of customers in tier II and III towns. The fact is also reflected in the booking list as 50-70% come in smaller towns as compared to metros. If everything be as it is, in three years there will be overcrowded roads with Tata Nano. Presently, total annual car sales in the country is at 12 lakh and Tata has already estimated bookings of 10 lakh for the Nano, he said. Some official from government agencies also worried in view of the expected congestion. Dr N S Srinivasan, former head of the transport and transportation division of the Central Road Research Institute, estimates the growth of car traffic in central business districts (CBDs) of cities alone was six per cent during that period. He said that in comparison to the traffic, roads had not been widened due to buildings. And flyovers are not the exact solution of the problem. As a result traffic in major metros doubled and awesome in some cities. Volume capacity ratio, by which congestion is measured, has gone up from 0.5 to 2 in Chennai, to 3 in certain CBDs in Bangalore. The situation in tier II and tier III towns, where roads are often only half the width as in metros, is only worse. Ministry of Urban Development’s transport division director Sanjeev K Lohia said, “Widening of roads in tier II and III towns is permissible under the JNNURM. But, according to the national urban road transport policy, central allocation has to prioritise urban transport facilities over road construction, or facilitation of private transport.”
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