Society of Indian Automobile Manufacturers (SIAM) finds that passenger car sales grew 15% in the four months up to October, but by comparison Tata's Nano is way off the pace. Urgent fire fighting is required.

Maruti Suzuki record sales

Japanese owned Maruti Suzuki go from strength to strength, selling over 100,000 units for the second month in a row. November sales reached 112,554 vehicles, an increase of 28% on the same month last year.

Korea's Hyundai also reports impressive figures, increasing sales by 12% to 31,540 units. Home grown, Mahindra and Mahindra are up 17% on the previous year, with November sales of 25,166 vehicles.

Nano in reverse

By contrast, while the Indian auto-market grows, Tata Nano sales have gone in to reverse. With safety issues fresh in people's minds, sales dropped for the fifth consecutive month. Despite being heralded as the cheapest car in the world, November sales – just 509 units - were the lowest since its high profile launch in July last year.

This year's November sales are down 85% on last year and decline is rapid. In July this year sales were 9,000 units, since then the trend is startling. Sales dropped to 8,103 units in August, 5,520 in September, and 3,065 in October before hitting rock bottom last month.

Tata being squeezed by new entrants

The Nano story is reflected across Tata Motors passenger cars, with November sales dropping to 15,340, down from 20,706 a year ago. SIAM says Tata's October market share of passenger cars is 12.2%, down from 13.2% seven months previously.

With GM - up 18% - and Ford reporting strong growth Tata are likely to continue to feel the pinch. Compounding the problem is the fact that Toyota appears to have identified India as the market to off set declining US sales. They aim to double sales – circa 73,000 in 2010 - over the next 12 months.

Reconnecting the "People's car" with the people

Given the strength of the competition, Tata needs to quickly reestablish trust in the Nano, cheap can not be mistaken for unsafe. Safety fears and questions about quality need to be countered.

The brand also needs to rediscover it's unique positioning and reconnect with its target market; two-wheeler owners. While the Nano is a car it fills a unique space between two-wheeler and car, and needs to be marketed accordingly.

If they fail to do this, sales are unlikely to match the hype and undoubted potential of this innovative model and brand.

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