With bookings for Tata Motors' Nano set to begin tomorrow, there is a huge rush for application forms – despite prospective buyers having to pay Rs95,000 upfront. This is the steepest booking fee charged for a car in India, and represents about 85 per cent of the minimum ex-showroom price of Rs112,735 for the standard version.
The booking period will last for 17 days and will be unique in that booking alone will not guarantee a buyer the car. Tata Motors has earmarked just 100,000 vehicles for the first phase, and the new owners will be decided by a computerised random selection procedure. Within 60 days of the closure of bookings, Tata Motors will process and announce the allotment of the cars.
Tata Motors has promised price protection for the first batch of allotments of the car. But the booking amounts will not yield any interest for the customer. Deliveries will commence from July 2009. In Mumbai, a Nano will cost Rs134,250 and in New Delhi, Rs123,360 for the standard or base version, excluding registration, insurance and service costs.
Despite the steep terms, consumers flocked to Tata Motors showrooms and other designated outlets to grab application forms. At many such touch points of dealerships, banks and other retail outlets, officials were found struggling to keep pace with the demand for forms.
According to conservative estimates, about 10 lakh forms have been sold already across the country, considering that Tata Motors used 30,000 outlets in about 1,000 cities for the distribution purpose.
About 218 dealers of Tata Motors, each of whom had been given more than 2,500 forms each to begin with, reportedly ran short of supply by the third day. In addition, many of the branches of the State Bank of India (SBI), with whom Tata Motors has entered into an exclusive agreement to manage the booking process, have already run out of forms. Sales of application forms priced at Rs300 started on 1 April.
"We have already sold 50,000 forms at our dealerships. This figure does not include the sale at our Westside apparel stores and Croma appliance outlets," said an official with Tata Motors in Mumbai.
In another first, Tata Motors is also offering online bookings for the Nano. An online application will cost Rs.200. The Tatas have also tied up with 15 national banks such as Bank of Baroda, Punjab National Bank, Bank of India and Dena Bank to facilitate the easy disbursement of loans for its vehicles.
The first set of cars is being manufactured at Pantnagar in Uttarakhand and Pune in Maharashtra. Eventually, they it will roll out from the new project site at Sanand in Gujarat, some 45 km from the state's commercial capital Ahmedabad. This site will initially produce 250,000 cars, going up to 500,000 units by the end of next year.