Waiting List for $2,000 Tata Nano Could Stretch for Years

By some estimates, roughly 1 million customers throughout India have signed up to purchase what is billed as "the world's cheapest car." With a base price of only $2,000, the base model of the Tata Nano city car comes without airbags, power steering, power brakes, a radio and air-conditioning. But despite the Spartan spec — or perhaps because of it — the low-cost Nano has become a sensation.

After making a splashy public debut on March 23 in Mumbai, the Nano officially went on sale from April 9-25. For a fee of around $6, customers could apply to purchase a Nano at more than 30,000 locations in 1,000 cities across India. Orders could also be submitted online.

The response to this unusual booking process appears to be overwhelming, so much so that Debasis Ray, Tata Motors' head of corporate communications, told Inside Line the results are still being calculated days after the order books were officially closed. Several Indian media outlets have reported that Nano bookings could reach 1 million, though Ray said he had "no idea" where these publications were getting that figure.

"Tata Motors has not said anything of the sort," Ray said, adding that "it would be presumptuous of the company" to report such a figure ahead of the official tabulation. But if the estimate of 1 million bookings is even close to being true, the Nano would (at least theoretically) double the annual sales rate of the current best-selling vehicle in the world, the Ford F-Series pickup.

Early unofficial sales indicators point to the Nano being a huge hit in India. "[The Nano] is a new product and a game-changing product," said Ray. "People from every walk of life have been going into showrooms and checking out the car."

A salesperson at Concorde Motors, a Tata Motors dealership in Mumbai, told Inside Line that the showroom was "extremely crowded" during the days the Nano was on sale. He estimated the dealership received up to 400 applications each day the booking process was open.

Limited initial production could make for a long wait. The Nano is currently being built at Tata Motors' factory in the northern town of Pantnagar. With an annual capacity of only 50,000 units, production will fall far short of demand. A larger factory is being completed in Sanand, in the western state of Gujarat. The new facility will come online by early 2010 and have an annual production rate of 350,000 units. This could be increased to 500,000. Yet, even at full capacity, it could take Tata Motors years to meet orders.

The first 100,000 Nano customers will be chosen randomly via a computer system within 60 days of the closure of bookings on April 25. These first 100,000 will also have factory-guaranteed price protection, to prevent greedy speculators from upping the cost.

Customers who don't make the first cut can remain on the waiting list, but are also free to opt out. The first deliveries of the Nano are scheduled for July.

Inside Line says: The world's cheapest car looks to have a waiting list worthy of a Bugatti. — Nick Kurczewski, Correspondent