Nano bookings: Smaller towns trail metros

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The Tatas' small car Nano has evoked greater response from metropolitan centres than smaller towns, widely perceived to be the market for it, if the sale of applications at various bank branches is anything to go by. The official figures are yet to be made public, but senior bank officials confirmed to Business Line the lacklustre demand for Nano in smaller towns.

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The Tier II, Tier III towns, which were originally perceived as the primary market for the Nano, accounted for only about 30 per cent of the total bookings, according to senior bank officials.

"The demand for Nano in Tier II, Tier III towns was generally low but picked up a little in the last two-to-three days of booking," said a senior official of a public sector bank. Other public sector banks also shared the same view.

Why the POOR response

The higher-than-anticipated price point, lack of adequate infrastructure in these towns and the time lag between the booking and actual possession of the car were the key factors for lower demand from these towns, according to S.K. Goel, Chairman and Managing Director, UCO Bank.

"Rough estimates point out that metro and urban cities accounted for more than 70 per cent of the total bookings while Tier II and Tier III towns comprised a meagre 30 per cent or so," Goel said.

The bad roads in smaller towns turned out to be a major consideration.

Not sturdy enough

"People usually look for stronger and sturdy cars in such towns and Nano, they feel, does not fit the bill," he pointed out explaining the reason for the lower demand.

Two-wheelers were the conventional mode of transport in smaller towns and people would take some time to graduate to a four-wheeler, a senior analyst at a research firm said.

"People in rural areas usually prefer a vehicle which can be used for transportation of small goods as well," indicating that Nano, it was felt, might not serve the purpose.

Price point

The price point of Nano is also an important factor so far as the demand for the car is concerned, bankers observed.

"The basic factor of the %u2018one lakh' car has disappeared and now the base model of the car costs more than Rs 1,20,000, this has discouraged some people to book the car," Goel said.

More than 50 per cent of the bookings made were also purely to make money rather than to own the car.

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"People want to earn 15-20 per cent premium by selling the car allotted to them to someone who wants to purchase it with ready cash in hand to garner some profit," Goel pointed out.

United Bank of India has done 3,600 bookings of the car with an equal share of metro and small towns.

"Many corporates in metro cities have gone for bulk bookings and this has shored up the booking figures of metros," said the bank's Executive Director, T.M. Bhasin.

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