Tata Nano Goes on Sale

Bookings for Tata Motors Ltd.'s Nano minicar began Thursday, with the automaker hoping a strong debut for the world's cheapest car will lift its fortunes.

The base model of the snub-nosed car will cost 123,360 rupees ($2,462) at New Delhi showrooms but will come without air-conditioning and heating.

The top-end model, which features front power windows, fog lamps and central locking as well as air-conditioning, will cost 172,360 rupees.

The 624-cubic centimeter gasoline engine car, measuring just over three meters in length, went on sale at all dealerships of Tata Motors as well as outlets of Tata Group's retail chains - Westside, Croma, Titan and Tata Indicom.

Tata Motors has also tied up with the State Bank of India, the country's biggest bank by number of branches, and its subsidiaries as well as 18 financiers for accepting bookings for the Nano until April 25.

"Lots of customers are coming to book the Nano," Rajeev Sethi, marketing manager at New Delhi-based dealership A-One Motors said by telephone. "A number of customers are entering our showroom with helmets, which means they are motorcycle users. Many are opting for finance."

Debasis Ray, a spokesman for Tata Motors, India's biggest automaker by sales, said the company has received an "encouraging response" to the Nano. He declined to elaborate.

Tata Motors introduced the Nano on March 23, driven by its chairman Ratan Tata's six-year old dream to enable millions of motorcycle and scooters users in the South Asian country upgrade to a safer and more comfortable four-wheeled vehicle.

Analysts have argued that the Nano may not be a money spinner for debt-strapped Tata Motors until the company reaches a large-enough sales volume, but the Nano may just help Tata Motors lift sales of its other cars such as the Indica and Indigo because of the hype surrounding the minicar, said K. L. Paul, general manager of Wasan Motors Ltd. in Mumbai.

Tata Motors will initially produce the Nano at a factory at Pantnagar, in the northern state of Uttarakhand, because a dedicated plant for the car is currently being built in the western state of Gujarat.

The Pantnagar plant can make 50,000-60,000 Nanos a year until the new plant begins operations by December or early next year, producing 250,000 cars a year.

Tata Motors initially planned to introduce the Nano in the fourth quarter of 2008, but violent protests from a political party and farmer groups over disputed land forced it to abandon a manufacturing site in the eastern state of West Bengal.

The revised schedule means the car will now be delivered from July in phases to 100,000 customers chosen in a lottery.

Due to production constraints and expectations of high demand for the Nano, Tata Motors will pay an 8.5% interest rate to customers who retain their bookings for the first year and 8.75% for the second year.

Customers who want to buy the Nano will have to purchase an application form for 300 rupees and either pay the entire booking amount at the various dealerships, the State Bank of India, Tata Group stores or via the internet.

They can also choose to pay as little as 2,850 rupees and finance the rest of the booking amount through preferred financiers such as State Bank of India and ICICI Bank Ltd.

"The response is excellent," said Wasan Motors' Paul. "All types of people are booking the car - from students and doctors, to even film stars."

Mumbai is home to the country's film industry, also known as Bollywood, the world's biggest by number of films produced each year.