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Can slumdogs save millionaires?
April 12, 2009
DREAM OF MANY: The Tata Nano, the world's cheapest car, in a showroom in Mumbai earlier this month. --PICTURE: AP
MARUTI Bhandare, a 45-year-old cobbler from a Mumbai slum, couldn't even dream about owning a car.
Then Nano arrived and he began to dream again. The world's cheapest car at about 130,000 rupees ($3,900) is within his grasp.
Now, he's keeping his fingers crossed that luck favours him and he gets his hands on his 'dream car' when the first batch of owners are announced in June.
He said: 'Since the announcement last year, I have been saving 150 rupees a day.'
He was among the first few in Mumbai to book the fully loaded top-end version of the Nano on Thursday.
He made an upfront payment of 140,000 rupees and even refused a loan offered by a bank.
To get to manufacturer Tata Motors' outlet, he couldn't afford a cab and had to walk.
Fulfilling his long-cherished dream is his priority, MrBhandare told Mumbai tabloid Mid-Day.
Like him, millions of other poor Indians will achieve their dream of owning a car, thanks to this car.
However, Tata is hoping that the world's cheapest car would show it a way out of reducing the debt it has been saddled with.
But there isn't encouraging news yet.
Analysts say Nano sales won't do much in the short term to help the debt-strapped company.
It is facing falling sales and is in talks with banks to re-finance a US$2 billion ($3 billion) loan it took out to buy luxury brands Land Rover and Jaguar from Ford last year.
There are questions about whether it will even make money off those first ultra-cheap Nanos, although chairman Ratan Tata denies this is a philanthropic venture.
Auto analyst Vaishali Jajoo of Mumbai's Angel Broking estimated that even if Tata Motors manages to sell 250,000 Nanos a year, it will only add 3 per cent to the company's total revenues.
In the last quarter of last year, Tata Motors reported its first net loss for seven years, of US$54m, as sales of medium-to-heavy commercial vehicles in India fell by nearly 60 per cent, Economist reported.
During the same quarter, an attempt to raise US$885m through a rights issue ended up with Tata Sons, the group holding company, taking up 61 per cent of the ordinary shares.
The firm's credit rating is also under pressure. Last month, Moody's cut its rating from B1 to B3 with a negative outlook, the second cut in five months, and this week Standard & Poor's reduced it from BB- to B+.
Customers who are desperate to get the first batch of Nanos are expected to place deposits worth up to $1billion.
The firm can keep this money for at least three months before the allocation is completed.
Those who want to be considered for the second batch of cars will be paid interest (at well below the market rate) after a year.
But Tata will get to keep at least $200m interest-free while it ramps up production, Economist reported.
But that has not stopped Mr R Sampathkumar in the southern Indian city of Coimbatore to make a deposit of 3,809 rupees for Nano.
Babe magnet
The 30-year-old who is single, makes about 20,000 rupees a month as a goldsmith and says he wants a Nano for 'status'.
'Automatically, women will come forward,' he said, grinning.
Tata will accept orders until 25 Apr and then randomly select 100,000 people who will get the first shipment of vehicles.
Company spokesman Debasis Ray said the company would not release data on the number of orders until after the process closed, but added that 'the signs are encouraging'.
He said 300,000 people had visited Tata's 400 showrooms across the country since the car went on display 1 Apr.
In the last two weeks, the Nano website has gotten 20 million hits, he added.
Can slumdogs save millionaires?
April 12, 2009
DREAM OF MANY: The Tata Nano, the world's cheapest car, in a showroom in Mumbai earlier this month. --PICTURE: AP
MARUTI Bhandare, a 45-year-old cobbler from a Mumbai slum, couldn't even dream about owning a car.
Then Nano arrived and he began to dream again. The world's cheapest car at about 130,000 rupees ($3,900) is within his grasp.
Now, he's keeping his fingers crossed that luck favours him and he gets his hands on his 'dream car' when the first batch of owners are announced in June.
He said: 'Since the announcement last year, I have been saving 150 rupees a day.'
He was among the first few in Mumbai to book the fully loaded top-end version of the Nano on Thursday.
He made an upfront payment of 140,000 rupees and even refused a loan offered by a bank.
To get to manufacturer Tata Motors' outlet, he couldn't afford a cab and had to walk.
Fulfilling his long-cherished dream is his priority, MrBhandare told Mumbai tabloid Mid-Day.
Like him, millions of other poor Indians will achieve their dream of owning a car, thanks to this car.
However, Tata is hoping that the world's cheapest car would show it a way out of reducing the debt it has been saddled with.
But there isn't encouraging news yet.
Analysts say Nano sales won't do much in the short term to help the debt-strapped company.
It is facing falling sales and is in talks with banks to re-finance a US$2 billion ($3 billion) loan it took out to buy luxury brands Land Rover and Jaguar from Ford last year.
There are questions about whether it will even make money off those first ultra-cheap Nanos, although chairman Ratan Tata denies this is a philanthropic venture.
Auto analyst Vaishali Jajoo of Mumbai's Angel Broking estimated that even if Tata Motors manages to sell 250,000 Nanos a year, it will only add 3 per cent to the company's total revenues.
In the last quarter of last year, Tata Motors reported its first net loss for seven years, of US$54m, as sales of medium-to-heavy commercial vehicles in India fell by nearly 60 per cent, Economist reported.
During the same quarter, an attempt to raise US$885m through a rights issue ended up with Tata Sons, the group holding company, taking up 61 per cent of the ordinary shares.
The firm's credit rating is also under pressure. Last month, Moody's cut its rating from B1 to B3 with a negative outlook, the second cut in five months, and this week Standard & Poor's reduced it from BB- to B+.
Customers who are desperate to get the first batch of Nanos are expected to place deposits worth up to $1billion.
The firm can keep this money for at least three months before the allocation is completed.
Those who want to be considered for the second batch of cars will be paid interest (at well below the market rate) after a year.
But Tata will get to keep at least $200m interest-free while it ramps up production, Economist reported.
But that has not stopped Mr R Sampathkumar in the southern Indian city of Coimbatore to make a deposit of 3,809 rupees for Nano.
Babe magnet
The 30-year-old who is single, makes about 20,000 rupees a month as a goldsmith and says he wants a Nano for 'status'.
'Automatically, women will come forward,' he said, grinning.
Tata will accept orders until 25 Apr and then randomly select 100,000 people who will get the first shipment of vehicles.
Company spokesman Debasis Ray said the company would not release data on the number of orders until after the process closed, but added that 'the signs are encouraging'.
He said 300,000 people had visited Tata's 400 showrooms across the country since the car went on display 1 Apr.
In the last two weeks, the Nano website has gotten 20 million hits, he added.
