Tata Motors plans new small car ‘X0’ to optimise production capacity at Sanand

With the Nano, the small car from Tata Motors, hitting a prolonged rough patch in the marketplace, India's largest automaker by turnover has an alternate plan that would see the roll out of another small car at its Sanand plant in its bid for optimising production capacity at the Gujarat plant.

The move formed part of an overall plan to rejig production at Ranjangaon, Pune and Sanand Gujarat plants and comes at a time when the automaker posted its second-lowest wholesale dispatches of 948 Nanos in April, in a clear underutilisation of its 2.5 lakh units capacity.

ET had learned that Tata Motors was considering production of its new compact car, which was under development, at the Sanand plant and expected to roll out by 2015. The aim was to optimise production at Sanand facility and speed up investment on a project, that had not met milestones and had been severely delayed due to low Nano volumes.

The Economic Times , quoted a person close to the development as saying that the company had recently conducted a feasibility study for the production of 'X0', the new compact car, based on the Indica platform.

With capacity utilisation currently under 20 per cent the company was taking a major hit on its cost per Nano from Sanand and the idea was to improve capacity utilisation and gain from the tax incentives too.

The average monthly Nano dispatches in the second half of FY-13 were down to 2,400 units a month from 6,600 units a month in the first half, before its  second-lowest dispatch in April 2013.

Meanwhile, Tata X0 is the new small car under development at Tata Motors' Ranjangaon plant near Pune according to crazyengineers.com website. The website cited sources close to the development as confirming that the new compact car would be based on the popular Indica platform and might roll out only in 2015.

The X0 which would draw design  inspirations from Indica would carry the 'small car' label, along with the Nano brand.

The performance of the Nano in terms of numbers sold has been much below expectations, with the company, in April shipping only 948 units which was only a fraction of the  8028 units in April 2012.