beyondbrics

Granted, it was always meant to be the jewel in Tata Motors’ crown, but this might be taking it a bit too literally.

Tata Motors on Monday unveiled the Goldplus Nano – a one-off showpiece version that sees “the People’s Car” encased in 80kg of 22 carat gold, 15kg of sliver and 10,000 semi-precious and precious stones.

What was originally marketed as the everyman’s car has been transformed into a golden chariot, highlighting the paradoxes inherent in one of the world’s fastest-growing economies, where the extremely rich live side-by-side with the severely impoverished.

The car itself is priced at a relatively modest $3,000. But at its current price – $1,819 per troy ounce – the gold alone adds $4.68m. Perhaps the Nano can now be considered a long-term, rather than short-term, investment.

At the media event today, there was little mention of August sales figures – at 1,202 units, down 88 percent from April’s 10,012 units, and dipping dangerously close to November 2010’s all-time low of 509. For a car that launched with a 100,000-customer waiting list in 2008, these are dire times indeed.

“Really for the Nano project to make any sense, you need to sell between 15,000 to 20,000 cars every month and have this 15,000-20,000 range for a significantly long time,” Deepesh Rathore, managing director for India at IHS Automotive, told beyondbrics. “Only then will you show any money on behalf of the Nano project – so we’re not anywhere close to that.”

Chariman ot Tata, Ratan Tata himself spent Monday evening at the unveiling at the National Centre for the Performing Arts, but it was CK Venkataraman, COO of Titan’s jewellery division, who put on a show.

“It is 360AD,” he boomed from a darkened stage, while drums thudded and birdsong twittered over the sound system, narrating the story of a mythical emperor’s golden chariot. Flashing lights erupted. “Cut to 2011AD…the Tata Nano is about to be turned into the golden chariot – 35 horses, no less.”

As flashes popped, the car appeared, looking like nothing so much as a golden version of the faux-silver horse-drawn carriages that trawl Mumbai’s famous Marine Drive, gold hubcaps and all.

Tata has plans to combat low sales by opening exclusive Nano-only dealerships throughout rural India, the market for which the car was originally intended. The move has worked with the more utilitarian Tata Ace mini-truck, but Rathore said operating and start-up costs would prevent many entrepreneurs from starting the dealerships.

“I’m unsure of the purchasing capacity of these small towns in India. At that price [Rs 150,000 to Rs 200,000] a number of very good condition used cars are available,” said Rathore.

The average Indian, Rathore added, isn’t so keen to advertise the fact that they can only afford “the world’s cheapest car”. “A first time owner of a car has a lot of pride for his new vehicle and they don’t want to be seen as someone who went for a cheap car,” he said.

Analysts also blame the Nano’s poor safety record for the decline in sales. Several incidents of the cars spontaneously erupting into flames were widely reported, pushing Tata to offer its existing 70,000 Nano customers a safety upgrade.

Tata had set out to be the gold standard for those who wish to travel in style affordably. It has certainly got the gold bit covered with this custom version.

Related reading:
Tata sets Nano launch date, FT
FT puts Nano through its paces [Video]