Johnny Oommen is the Head of International Business, Passenger Car Unit for Tata Motors Limited. Oommen has a proven track record in bottom-line results, strategic marketing, problem solving and people management. He has also worked for top brands like BMW, MINI, Rolls-Royce, General Motors India and even Sony Entertainment Television. Oommen was in Kathmandu last month to launch the much-awaited Nano car in Nepal. In an interview with New Business Age, he shared his views on Nano’s market prospects and its suitability for the Nepali roads. Excerpts:

 

 

Nano is now in Nepal. How do you feel about it?

It is a momentous occasion for us. When we launched the Nano in India nearly two years ago, we were clear that a product like Nano will find its way to markets that are closer to India. Nepal, as you can see, today is one of the earliest markets outside India that we have decided to hit with Nano. We are very optimistic and confident that Nano will find acceptance across Nepal.

 

How is the car doing in India?

We have principally launched in India and Nepal is one of the earliest markets outside India. In India, the car has stabilised and is doing quite well. We initially had supply problem then we went into producing as much as the pipeline demand we had. Today, we have really expanded production and distribution capacity and we have 617 dealerships and sales point in India. We are going to introduce 300 exclusive Nano outlets in the coming month. So, the Nano is definitely looking good in terms of results in India.

 

In Nepal, Nano is going to cost much higher than in India because of high tax rates. How do you see that?

Well, even in India, the pricing has moved up because of increase in import cost, material cost and distribution cost. So, today Nano is more expensive than it was two years ago. In Nepal, the duty and tax structure is such that there is 240 per cent increase over the price that we have in India. Despite that we are able to bring the Nano into Nepal in extremely attractive price. We believe that despite all that multiplier, we are offering a product that will make motoring affordable to a lot of Nepali population. Just to give you an example, starting price of the Nano Standard is Rs 798,000. Thanks to the tie-ups, we have got into with as many as 10 banks, we will be able to, for instance on the Standard, take a down payment of Rs 10,000 and work out a monthly instalment of Rs 11,111. So, that is a very attractive proposition. I think we are only adding to the expectation around Nano being a very affordable, acceptable motor.

 

Do you have any volume-wise target sales for Nepal?

Sky is the limit. We are looking at various segments. We believe as a car, it has potential for people who are currently without a car. Let’s say they are using two-wheelers. We are looking at the people who have just started working, first-time job holders, young couples, small families, and of course people who already have one or two cars and are looking at additional small vehicle in the family. We believe, if we look at each of these segments, there is a lot of potential and we have increased production capacity in India so we are in a position to fulfil the demand in the Nepali market.

 

How do you see the Nepali market demand for cars, especially for Nano?

Even though the industry for a couple of years may not have grown as per the expectations of most of the automobile manufacturers and even the Nepali economy, we believe that the Nano is a product so attractive, packed with features like space, compactness, safety, manoeuvrability and fuel efficiency, all these are extremely attractive points. We believe with all these, it should be able to attract far more people in Nepal. We believe in creating a new segment. While people may be considering other cars, it will draw new people into the world of motoring. In that sense, it is really a limitless kind of thing. It is difficult to predict but our expectations are high.

 

How did you find the reaction of people here after the soft launching and beginning of Nano Yatra?

So far, it has been overwhelming. We have received more than 5,000 enquiries, which is not a small number. It is very encouraging. We are only looking forward to actually start delivery. We will be announcing booking today and hopefully within a month’s time we should be able to start delivering.

 

Nano is the cheapest car in the world. How was it possible to make a beautiful car in such low price?

The perception of cheapest car might have a lot of people believing that we must have cut corners or compromised. The truth is that Nano is the result of intelligent innovation. We have designed the car in a completely new way so that we were able to rethink how to manage cost and a lot has been done without making compromises. In terms of compactness, it is eight per cent more compact than the closest competitor. In terms of space inside, it is 21 per cent more spacious than closest competitor. In terms of gradability, it is as good as any other competitor. In terms of ground clearance, it is as good as or better than cars in one or two segments above the Nano. In terms of fuel-efficiency, the Automotive Research Association of India has certified fuel-efficiency of 23.6 kilometres per litre. Even in city driving that becomes around 20 kilometres per litre. It is still by far the best among others in Nepal. So, all of this is what we call innovative. These are all important to the customers and in fact they are better than what competitors offer. We have been able to do this in lower costs and that is what we would like to gift Nepal today.

 

Sometime back, there were questions raised on the safety of Nano because there was abrupt fire on board. How has the company addressed the safety issue?

On the couple of incidents that happened, I must inform you that essentially they were to do with placement of some foreign object in the car. We can only certify that the Nano is an extremely safe product. It has been built with the highest standards of quality and after these couple of incidents; we actually improved whatever we needed to ensure that any such acts of unauthorised placing do not happen. It is difficult to expect any such incidents in the future. After those incidents happened, notwithstanding the fact that we knew Nano is a safe product, we submitted the car to a fresh investigation of design and everything in entirety. That investigation team included experts from outside Tata Motors so that it is a completely new investigation. You can often be blind to certain things because you believed the product for six to seven years is absolutely a safe product with the robust design and state of the art innovation. Despite our researches and belief, later we decided to make the robust car even more robust. We made enhancements to make it even more robust.

 

As a testimony of our confidence in the product, we are offering for the first time in the Nepali market, a four-year or 90 thousand kilometre warranty. Nobody else does that. We are extremely confident about the product and I think this warranty provision itself certifies the fact that we believe in safe, sturdy and robust car.

 

Given the hilly terrain and not so perfect roads even in cities, is Nano the right car for Nepal?