Tata Motors has released a statement dispelling rumours which stated that the automotive major was in the process of phasing out models with low sales. On April 04, 2012, rumours in the market hinted that the company was decommissioning its compact car Indica, which was launched 14 years ago. Instead, it was said to be focussing on modern models present in the same segment, namely Vista. It was speculated that Sumo Spacio and Indigo Marina would also be put out of production.
This rumour was said to be based on the poor sales of the above mentioned cars, since low volumes result in a decline in market share as well as lower profitability. It was speculated that poor sales compelled the company to discontinue the failing cars and bring out some trendy vehicles that could compete well in the market.
Speculation was also rife that the manufacturer was about to use its Sanand plant, which is dedicatedly used for Nano, to produce other vehicles made at the Pune unit. This was said to be carried out since the judicious usage of the resources at Sanand was expected to be more profitable. In the past, Tata Motors projected production of more than 20,000 Nanos, even though the model's sales only reached its highest ever sales of 10,000 units in March 2012.
The company has earlier removed failing cars from its line up, such as Sierra and Estate. Nevertheless, the manufacturer was quick to quell the rumours of doing away with Indica in the favour of fuel efficient cars like Vista.
Debasis Ray, Head, Corporate Communications, Tata Motors, stated that it does not intend to 'de-emphasise' Indica. It has been known to present fuel efficient variants of Indica, such as Indica eV2, which renders class leading average of 25 kmpl, in the diesel hatchback segment. This model was launched alongside the new edition of the Indica Vista model.
He continued, saying, “It is Tata Motors' practice to continuously refresh its portfolio, driven by internal technology development and consumer needs. The company has well-articulated strategies for each of its family, comprising the Tata Nano, the Tata Indica/Indica Vista, the Tata Indigo/Indigo Manza, the Tata Sumo, the Tata Safari and the Tata Aria. They will be visible in the market place as per the company's plans.”
Regarding the move to shift production from Pune to Sanand, he commented that the manufacturer has no such plans and will keep on developing Nano at the latter, while the former will still be used for producing other models. He said that full resource utilisation at Sanand would be reached as sales of Nano improve.
