Tata Motors dealers are in an unforeseen situation. They are facing nearly 10-15 percent cancellations for the Nano models booked during the booking period in April 2009. Most of the bookings are coming from those who have opted for a loan and are not willing to pay interest on the un-applied loan. This accounts for cancellation of nearly a tenth of booking for Nano models.
There are also customers who are not really willing to wait too long for the delivery of the model either. They are ready to switch to another car model at a little higher price than to wait for a car for next few months. This is especially true for customers who are at the tail-end of the bookings and have received delivery period or end 2010 or early 2011. The top end model of Nano costs Rs. 1.80 lakh whereas the base model of M800 costs Rs. 1.92 lakh. Customers are willing to shell out more money to own a car today than to wait for a car for one year. Tata Motors had launched all nano new cars with much fanfare and opened its booking period earlier in April this year.
Tata Motors has already faced similar situation when it had first launched Tata Indica in 1999.
