EMI Provokes Nano Cancellations

Tata Motors has completed allotting the first one lakh Nano in July. Some 55,000 people were named 'retainees' whose booking amounts Tata Motors had retained, promising to pay them interest at the rate of 8.75%.

Currently, it has been noticed that people are cancelling their allotted cars citing the high EMI's the banks are charging on the cars than the usual EMI's.

Central Bank of India received around 9,200 applications for the Tata Nano, of which 7,200 people got their allotments. However, 4,700 applicants are yet to get their cars only in 2011, and a majority of them have opted out according to an official with the bank.

People are being deterred by the huge gap the actual car delivery date and the start of the EMI installments. This is because people are asked to pay the EMIs on the booking amount (between Rs 95,000 and Rs 1,40,000, depending on the model, and the interest paid thereon at the rate of 10%-10.5%) start a month after allotment.

It has been revealed that more "than 60-65% of the 5,000 people" who applied for the car through Union Bank of India have either not got allotment or chosen not to take it.

The Nano is being manufactured at the Pantnagar facility of Tata Motors, which has an annual capacity of 50,000 units. It is apprehended that once the Sanand plant in Gujarat is completed, the company will manufacture 350,000 units a year.