Tata Mulls a Fancier Next-Generation Nano

Former Tata Motors Ltd. Chairman Ratan Tata says the company plans a better-equipped second-generation version of its slow-selling $2,800 Nano, Automotive News reports.

Tata, who championed the original car, predicts the new model could reach annual production of 500,000 units more than 20 times last year's sales volume. He did not say whether the project has been approve or when the car might debut.

The company's objective in redesigning the Nano would be to shift the minicar's image from "cheapest car in India" to "most value in its segment," according to the chairman emeritus.

It's a familiar refrain. Over the past three years Tata has tweaked the original car's 37-hp 3-cylinder engine and rolled out such upgrades as power windows, fog lamps, air conditioning, a cupholder, central locking, improved steering, power brakes, a second windshield wiper, a four-speaker sound system and a longer warranty.

But the car continues to struggle with a downmarket image. Tata says a next-generation version would be designed to "stand out" in the marketplace as "more of a real car."

The Nano debuted in 2009 amid forecasts that annual sales would reach 1 million units. But demand peaked at less than one-tenth that volume. AN says sales last year slumped below 22,000 units.