The marketing strategies that Tata Motors recently implemented to increase the declining sales of Tata Nano have finally paid off. Nano, which is the world’s cheapest car, is all ready to recover from the falling growth rate for the past five months and post huge sales figure in December.

It is projected that the Nano may achieve sales of around 5,000 units in December after it fell down to 509 units in November, which happened as a result of some spontaneous fires and lack of easy finance, according to top five dealers. In July 2010, Nano registered record sales of 9,000 units before falling down to the current level.

Most Tata car dealers have cleared the backlogs, and have helped enhance the production which had almost stopped at the Nano mother plant at Sanand in Gujarat.

“Sales of the Nano have picked up in the past 10 days. For the momentum to continue, the various schemes launched by the company will have to continue beyond December 31,” said a Mumbai-based dealer. Tata Motors spokesperson declined to comment. Tata Motors launched a number of schemes, such as zero percent finance scheme, 4-year extended warranty and Rs 99 maintenance contract, to lure the customers into buying the Nano. And, looks like they have pretty much succeeded in their endeavor.

“Effective communication has helped the company post better wholesale and retail sales this month. We will see the sales numbers rising in the next few months,” said Abdul Majeed, auto practice leader, PWC.

When the sales of the Nano were at an all time low, the top management of Tata Motors did its best to boost the dealers’ confidence and advocate changes such as staff training. “We have been asked to educate customers about changes in the product and new safety standards,” said a dealer in New Delhi.

While some dealers have cleared their inventories, others are still struggling to clear theirs and are at a disadvantage to bring in new stocks. Industry estimates suggest that Tata Motors will have a tough time clearing the Nano inventories which currently stands at 10,000 units.

Another important thing is that Tata Motors is planning to bring in an upgraded version of the Nano that will have more advanced features such as power steering, five speed gear box, in the first quarter of 2011. The upgraded Nano will be around 5-10% more expensive than the current model.

“The company needs to be cautious on the pricing front as any increase in the price will reduce the gap between the nearest competitors, forcing the customer to make a switch,” said Majeed.