Buy a Tata Nano, with a swipe of a credit card

In a first of its kind deal in the Indian automobile industry, Tata Motors on Wednesday in a bid to jumpstart flagging sales of Tata Nano has offered customers an option to swipe their credit card and drive out with the Tata Nano on the same day. Ranjit Yadav, president, Passenger Vehicles Business Unit, Tata Motors said: "This offer will enable customers to own a car in the fastest and hassle free manner. With the introduction of this offer, consumers get the benefit of converting the entire amount on the credit card into interest free installment, spread over a period of 12 months and manage monthly cash flow better."

When Yadav, a recent hire at Tata Motors joined India's largest automobile firm from Samsung India- the South Korean consumer electronic major's Indian subsidiary in September 2012, it was speculated that the automobile industry that lacks innovative methods to sell products could take a leaf from the fast moving consumer electronics business. This is precisely what Yadav, the former country head at Samsung (India) for the Mobile & IT Businesses brought to the table, by offering an option to customers to buy a vehicle through a credit card, the same way a mobile phone or a lap top is bought.

Tata Motors made an offer wherein customers can convert the entire amount in monthly instalments of 0% over a period of 12 months at an EMI of Rs.8,333 per lakh. Tata Nano has partnered with five banks for this special scheme -- Axis Bank, HSBC Bank, ICICI Bank, Kotak Mahindra Bank and Standard Chartered Bank. Customers in India, who have credit cards belonging to these banks can avail of this special scheme in 26 cities, across 75 Tata Motors Dealerships.

The latest initiative to prod customers to buy the micro-car assumes significance as sales of Tata Nano and other car models of the automobile major plunged 62% in February. Production at the Sanand plant in Gujarat was cut by almost 80%, as inventory of Tata Nano piled up at dealerships and stockyards. For Tata Motors, the latest initiative is critical as several finance schemes and offers for Tata Nano has come a cropper. The sales of the micro-car has fallen 7.29% in April to January of this fiscal year 2013 to 50,836 units versus 54,835 units. From the highs of 9,000 to 10,000 units a month, the average monthly sales of Nano has come down to 1,500 to 2,000 in December2012 and January 2013. While Tata Motors felt the brunt of the upheaval in the market, the other car makers have also felt the pinch.With discounts not doing the trick, innovative finance schemes and buyback offers have come to the fore to lure people to buy their dream cars.

German car maker, Volkswagen is offering a bouquet of schemes on its Vento sedan. A prospective Vento customer can trade in his old car for a new Vento sedan by just paying Re 1 and not paying anything for the first year and pay the balance a year later in full or as 36 EMIs. The company also gives the customer an option to pay 50% of the car price in the first year and the balance money after one year. Its not car makers alone, but even the dealers are chipping in with freebies. In Gujarat a Skoda dealer has come out with a scheme for customers, wherein a customer can buy a sedan Skoda Rapid, and he/she gets a Fabia hatchback free after five years.