Tata Nano is the cheapest car in the world. It is sold in home country India around Rs 1-lakh i.e approximately USD 2000. It is manufactured by Tata Motor Limited, the largest automobile company in India. It’s Chairman, Ratan Naval Tata envisions that Tata Nano to become a “People’s car“which is affordable by almost everybody. Tata Nano was first launched in India on 1st April 2009 and expected to be in Indian market by July 2009. Since launching, it has created a huge buzz all over India. Within the first two days of lunching, it has received 5500 booking. The figures keep increasing every day since the launching. What makes Tata Nano so cheap? Basically, by making things smaller, lighter, do away with superficial parts and change the materials wherever possible without compromising the safety and environmental compliance. It is said that Tata Nano has better millage than Toyota Prius and same gas emission as a scooter. Tata Nano will be imported to Malaysia in parts by Tata Motor Malaysia Sdn Bhd (TMM). It will be assembled in its two assembly plants i.e in Shah Alam, Selangor and Pasir Gudang, Johor Bahru. There are forty sale offices in Peninsular Malaysia nationwide. All Tata Nano cars will be distributed through these sale offices only. Order can be made vide these distribution centres or its web site. There are three types of Tata Nano cars available i.e. Tata Nano, Tata Nano CX and Tata Nano LX. However, due to hot weather in Malaysia, only Nano CX will be brought to Malaysia and will be sold here. The selling price (on the road) of Nano CX in Malaysia is RM 15,797 per unit. It is estimated that gross profit for the first year would yield RM 185,250,000, second year RM 365,275,000 and third year RM 397,052,500. Estimated monthly instalment payment is RM 198.88 for seven years period. With this price, the target market is very wide which includes those with income RM 2000 per month, students, female workers and scooters’ riders.
The diagram below shows the global foot print of Tata Motors.
2.0 SITUATION ANALYSIS
Tata Motors Limited is India’s largest automobile company, with revenues of Rs. 35651.48 crores (USD 8.8 billion) in 2007-08. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. The company is the world’s fourth largest truck manufacturer, and the world’s second largest bus manufacturer. In March 2008, Tata Motors acquired Ford’s UK based car brands Jaguar and Land Rover (BBC News, 2008). According to Ratan Naval Tata (Chairman of Tata Group), the need for an innovation like Nano has got to do something for the people of India and transport. Unavailability and poor quality of mass transport is a common problem in India. In a two wheeler, father driving with elder child standing in front and wife behind holding a baby is norm in this country. Thus, this is a relatively an unsafe mode of transporting a family. Thus, with this in mind Tata Nano was created as a safer form of transport. As one of its objectives is to become an Indian business conglomerate operating in many countries, Tata Nano will be introduced in Malaysia. 2.1Market Summary
It is estimated that Malaysia has more than 5 million motorcycles on the road, compared to over 4 million motorcars(ICE, 2001).The majority of motorcycle buyers or users does not own a car and belong to the lower and middle-income group. A significantly larger percentage of motorcycle users in Malaysia are male.
The company is targeting lower income group with family, first-time buyers of car (fresh graduates) and motorcycle owners.
Tata Nano will position itself as the world cheapest car and yet does not compromise the quality, safety and environment. This positioning will be achieved by leveraging Tata Nano’s competitive edge: industries experience...