It’s nothing new that cars in demand can command substantial premiums. But it’s hard to equate a Ferrari or even a Corvette with a Tata Nano. But it now appears the world’s cheapest car is in such demand, secondhand buyers are paying as much as a 30 percent premium to own one of the vehicles Tata Motors, the manufacturer, describes as the “people’s car.”
That’s a far higher percentage than premiums for Ferrari, Corvette and likely any other car.
Several top-of-the-industry publications’ web sites, including Motor Trend and Drive are reporting the alarming statistics.
The demand for the Nano, which costs an estimated $2,500 (depending upon the exchange of the rupee) is due to simple supply and demand — and greed.
India had a lottery system for the first 100,000 Tata Nanos distributed to dealers, not all of which will be delivered to customers until the end of 2010. Estimates vary, but there were at least 100,000 willing potential buyers for the first allotment of the car.
But Arif Fazulbhoy, a car salesman in Mumbai, India, said in an article in Drive that wealthy people in the country have a “fetish” with the Nano.
“They tend to be very rich people who want the Nano for the snob value because it’s new in the market.” Fazulbhoy said.
The most in demand Nano model is the XL, which has features like air conditioning and central locking.
The 30 percent market premium for the Tata Nano, by the way, is slightly more than $800 — about six months of wages for the average Indian worker.