Tatas using Tata Nano to gouge customers

On April 10, 2009 By pramitsingh Topic: Big Business, Media-political-industrial complex, Tata nano

In absence of proper government regulations of how companies lure money from consumers, especially big businesses, it is not suprising that Tata Motors is having a free run in selling the Nano.

The application forms cost Rs. 300 application forms. If you want to book the Nano online, you got to pay Rs. 200 extra. It is a wonder what a carefully orchestrated hype program can achieve.

If Tata Motors get 200,000 applications for nano, it will garner Rupees 2,300 crores as booking amount.  The company has spent Rs. 2000 crores on the Nano cars project. What's more, the whole booking amount is interest free for a year.

Based on proceeds from the application forms alone, Tata Motors will have sold equivalent of 600 Nanos.

Tata Motors says only 100,000 Nano cars will be delivered by March 2010, and only 50,000 this year. Why doesn't Tata Motors cap booking at 100,000 and deliver cars on a first-come-first-serve basis? If the company does not do this, government regulations to the effect must be put in place.

In collusion with the media and a pliant government, a big business entity has made sure it will get over the credit crunch caused by the Jaguar-Land Lover deal and a car industry in recession. Talk about using Public Money.


Think about it: If you started your own auto company, making a Rs. 1 Lac car is not hard but getting funds to take your dream further will be pretty hard. That is why it helps being a big company.

The government of India was similarly silent when real estate companies took advances for over-priced homes and mostly failed to give possession to consumers. Sadly, the interest they pay on consumers' boking amount is less than the interest consumers pay with their loans. Surely, the government must do some to bring a parity in penalty interests.

Coming back to the Nano: is this a public benefit project? Far from it.

The media forgot to remind us that if we wanted a small, environment- friendly car, there is the Reva Lelectric car and the government is giving Rupees 1 lac as subsidy.

The Nano, despite being a dream for the aspirational middle class, will be an environmental monster and master clogger of roads and galis of India.

Not the first time a private company is being a free reign over consumers' money in India. As the media-political-industrial complex likes to say, "It is all Good."

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