[Man of the moment...Mr Ratan Tata's hopes are riding on the Nano.]

By Patrick Jonas

THE Nano is on a pilgrimage.

Times are bad and like most of us, the car's makers too are turning to the heavens.

Tata Motors has already driven the Nano to the Golden Temple in Amritsar and to Khawaja Moinudeen Chisti's Dargah in Ajmer and the car may visit other pilgrimage centres too.

Prayers are needed in abundance before the car is launched on March 23 in Mumbai. For, on the Nano's future rests the fortunes of its makers.

Tata is struggling to repay US$3 billion (S$4.7 billion) in debt incurred during its acquisition of Ford's UK-based Jaguar and Land Rover marques last year.

The company's sales plunged 34.4 per cent year-on-year in the quarter ended December. From a net profit of Rs500 crores, the company's balance sheets showed a net loss of Rs260 crores.

While the auto industry globally is on a downhill slope, some see the Nano arresting the trend for Tata and bringing some cheer to its makers.

Mr Abdul Majeed, head of automotive practice at PwC in India, told the Financial Times: "This is a good gamble.

If this pays off for them, it could turn around their fortunes."

The Nano's rock-bottom price makes it the perfect product to launch in an economic crisis. After all, it costs only as much as the CD player in a luxury Lexus.

That's not the only reason for the upbeat mood.

There are millions in India who would dearly love to give up their two wheelers for a car. It is the cost that has been holding them back. At Rs1 lakh (S$3,000), the Nano is only double the cost of a motorcycle.

Prof Narayan Pant, affiliate professor of strategy and dean of executive education at Singapore's Insead campus, told tabla!: "Mr Ratan Tata's breakthrough insight was "what if we could build a car that was priced at Rs1 lakh?". This would address a new market that was not being addressed by current motor vehicle manufacturers.

Clearly the margins on this car would be much lower than those in the regular car segments.

"But the idea was to complement thinner margins with much greater volumes to make the enterprise viable. If it succeeded, it would have the additional advantage that competitors would find hard to replicate without changing their business models as well, never an easy task."

Tata therefore designed a new business model to achieve the price target.

The most dramatic of them: The Nano's assembly would be done by the distributor and not at the factory.

There is no dearth of interest in the car.

According to Tata, since the car was unveiled on Jan 10, 2008, the Nano website has recorded over 30 million hits and the creation of over 6,000 interest groups and communities.

If only a fraction of the people who have shown interest in the car make a booking, Tata is bound to drive back into the black.

The booking process and other details will be announced on March 23. And the cars will be on display at the company's dealerships from the first week of April with bookings for the vehicle starting from the second week of April.

An Economic Times report claimed that the booking amount will be around Rs70,000.

Initially, the company would take bookings of just one lakh cars as mass production of the vehicle would be possible only from next year.

Till then only 3,000 cars a month are likely to be manufactured.

There are reports that those who are lucky enough to get an allotment could make a sizeable sum reselling it at a premium.

Bookings can be done at Tata dealers and at select State Bank of India (SBI)branches. But not from its Singapore branches, a check with SBI revealed.

The Nano was supposed to hit the roads in October last year. The reason for the delay is now well known.

Tata was forced to relocate the car's manufacturing operations due to violent protests at the proposed factory site in Singur, West Bengal. The new plant, with an initial capacity to manufacture 250,000 units annually, is under construction at Sanand in Gujarat. Till then, the demand for Nano will be met through production at the company's existing factories in Pune and Pantnagar, Uttarkhand.

The delay seems to have helped Tata in one way. Raw material costs had soared last year and many wondered whether the company would be able to roll out the Nano at the promised price tag. However, in recent months commodity prices have collapsed keeping costs under check.

Shrinking the Nano has brought dividends to Tata.

The company has applied for 34 patents to cover its innovations.

"We shrank it, made the engine smaller and used fewer materials but we haven't taken any shortcuts in terms of safety or emissions," Mr Tata was quoted by London's The Times as saying.

A European version of the car was unveiled at the Geneva Car Show on March 3.

The Nano Europa, aimed at the international market, will be powered by a 3-cylinder all-aluminium petrol engine with a 5-speed automatic transmission.

German magazine Bild, citing an interview with Mr Tata, said the car will be sold in Europe for 6,000 euros (Rs3.93 lakhs) - not very much costlier than the lowest specification Segway, which is listed for sale with some British dealers at £4,795 (Rs3.5 lakhs).

The road ahead may look bumpy but Tata's steering of the Nano signals the company's ambition: A quiet ride into profitable territory.