Tata Motors Planning a new Small Car 'X0' based on Indica Platform

The home-grown auto major Tata Motors which has been going through a very bad phase is now planning to produce yet another small car 'X0' alongside the Nano in India. Sales of Tata Nano has come down dramatically, as against the last year April's 8028 units, the company could only sell 948 units of the Nano in April 2013. So, to counter balance things, the company is planning to optimise production capacities at the Gujarat plant by producing XO there.

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The move is part of company's plan to rejig production at its Pune and Sanand, Gujarat based facilities. According to a report published on ET, Tata Motors is considering to produce a new compact car at Sanand plant, which is under development now and is likely to roll out by 2015. The reason behind such a step is to optimise production at Tata Motors' Sanand facility and speeding up return on investment on the project.

A person close to the development of the new small car said that Tata Motors had recently conducted a feasibility study to produce the new compact car 'X0', which will be based on the Indica platform. "There is a thought process on producing the 'X0' in Sanand. With capacity utilisation at less than 20% at present, the company is taking a major hit on its cost per car from Sanand. The idea is to improve capacity utilisation and gain from the tax incentives too," said the person, who requested to not name him.