With Tata's share price up 60% this year in anticipation of Nano sales performance, success of the "world's cheapest car" has considerable bearing on the financial health of the company. A US$ 2 billion loan repayment, due next month - from purchase of Jaguar and Land Rover - increases the importance of strong figures.

Big numbers, but big enough?

Despite production capacity of just 100.000 vehicles between now and July 2010, India's leading auto company received paid orders totaling 203,000, worth total of US$ 500 million. Big numbers considering decline of global auto and the credit markets. Even more remarkable considering that a ballot will decide when buyers receive their purchase. Hailing their success, Tata took the time to thank the Indian public for their support.

Yet, in some quarters there are murmurings that sales are at least 50% below expectation, Angel Broking report, "Dealers and sources monitoring the bookings had anticipated that the numbers could hit over 800,000."

Converting interest to sales

Interest in Nano was huge. During the booking period Tata Nano website recorded 30 million hits, nearly 1 million a day and nearly 1.5 million people visited Tata showrooms. With over 600,000 applications bought - cost of R's 300 per application - final conversion rate of 30% appears low.

A complex booking system, lack of opportunity to test drive and the size of deposit required, deluxe, LX Nano required R's 140,000 booking fee - full price R 185,000 - have all been cited as reasons for low take up.

Tata figures show of total completed bookings, 70% were made using finance, the rest were cash purchases. Four thousand were cash bookings made online.

Only in India

Given speculation over success of initial sales it is easy to forget the magnitude of what Tata have achieved. For perspective, in the US, GM sold 172.000 light vehicles from their entire range in April 2009 (a 33% drop). According to industry commentators Nano orders represent 17% of all Indian passenger car sales - 1.22 million - during current fiscal year. Realistically, India is the only market in which such a sales drive could take place.

Interestingly, buyers have bought top end. Tata figures show, main entry point - 50% of all purchases - is the deluxe LX model, complete with air conditioning and electric windows. Only 20% of orders were for Nano Standard, the remaining 30% went for mid range CX model.

Financial short termism

While current market pressures make it inevitable, picking through initial sales results may be missing the point. At a time when automakers are on their knees Tata have developed a low cost highly efficient vehicle that is selling.

With big auto looking out of step in the current economic climate, Tata will hope they have developed a model for the times, with the mileage to cross borders.