Mumbai: Ahead of Nusli Wadia's removal in the December 22 "extraordinary" general meeting, the independent director of Tata Motors Ltd (TML) said on Wednesday that the Nano small car has proved to be "a serious drain on the financial resources" of the company.
In a presentation to shareholders, he said that the company was burdened with "heavy debt" and has a "substantial funding requirement for its future strategy".
"The Nano, initially a car conceived to sell at Rs one lakh was launched in 2008, has proved to be a serious drain on the financial resources of Tata Motors.
"Even at a price of Rs 2.25 lakh, the car neither sells nor is viable as every sale of the vehicle is at a substantial loss to the company," the representation said.
He said huge losses were incurred over the years.
"The plan on which the investment was made was for 250,000 cars while the production in the year 2015-16 was in the region of 20,000 cars and presently far less.
"The delay in closure of Nano is a serious drain on the finances of the company..." Wadia said.
He also said the small car had created negative image of the company`s passenger vehicle business and the investment and losses on Nano have been in thousands of crores of rupees.
"Concerns have been raised not only by me but by several others regarding the continuing operation," he added.