tata nano

Topics: Tata Motors, Tata Nano, Automobile Pages: 5 (1533 words) Published: January 7, 2014
World’s Cheapest Car Dies. A New Nano is Born
Tatas plan to make the car aspirational with 5 distinct variants  
Tata Motors has invested more than $1 billion in the Nano project and the point at which it will start getting a return seems to be receding. In the past 4 years, Tata has sold 242,431 Nanos, less than the 250,000 annual number it was looking to achieve at the time of the 2009 launch. Ratan Tata’s dream, in which families precariously perched on a scooter would happily squeeze into a Nano, hasn’t quite worked out that way. Now the company is reworking the concept, trying to move away from the excessive hype that greeted the launch. At the time, it grabbed international attention as the world’s cheapest car and the company was happy to ride the wave of euphoria. In hindsight, this clouded a clear eyed view of the market. It didn’t help that the launch coincided with the global financial crisis that fed into India’s economic slump. The company is now engaged in a process of winnowing out what works and junking or changing what doesn’t. The one-size-fits-all positioning is being turned into a many flavoured offering. (See table) The Nano manufacturer finds itself in an odd situation. On the one hand, its audacious bid for Jaguar Land Rover has paid off big time. Not only has the British unit been turned around, it’s been the salvation of the parent as its Indian passenger products (and crucially its commercial vehicles) have been sideswiped by the slump.  

Segmenting Customers 

Meanwhile, the Tata Motors drab line-up hasn’t got anyone’s pulses racing, even as the design and performance of the JLR cars have made them world beaters.  Given this context, the company’s being cautious with the Nano, a car that could become one of the great automotive icons if it’s marketed right and generates record-breaking sales. 

“We are on the fast journey in making the transformation, making sure all the fundamentals are in place, in trying to create aspiration around the brand, but a slow journey in making sure we don’t mess (up) on the fundamentals,” a company spokesperson said. “We should see a tipping point in the next six months’ time.”  The company wants to jettison the perception that good value doesn’t mean a trim level that’s pared to the bone to the point where it’s just a few steps above an autorickshaw on four wheels. The Nano needs to be aspirational, rather than spartanly utilitarian.  Tata Motors is hoping to cross the 10,000 per month mark in the next 12-18 months, from the average of 1,111 units so far in FY14 by refining the car and its marketing.  At its launch, much was made of the . 1 lakh price tag, which became a millstone. The price points of the new family of Nanos are expected to range from . 1.75 lakh to around . 3.25 lakh. 

Along with five trim levels, the company plans to offer four engine options — two petrol motors, one that runs on diesel and one on compressed natural gas. Power steering, a souped-up engine and better features are likely to debut soon. Meanwhile, an electric car and a hybrid are being worked on at the company’s UK R&D base, the Tata Motors European Technical Centre. 

The company has taken market soundings and segmented potential customers into entry-level firsttime buyers, those seeking replacements and additional cars, and others who want more features and performance.

When the 2012 version was launched, the Nano was a second car for half the buyers, a fourth were graduating from two wheelers and the remaining 25% were purchasing a car for the first time. While the buyers were spread across age brackets, the company feels it needs to work on appealing to younger people.  At the time of the launch, the car was bought by diehard Tata fans with implicit trust in the company. According to a study by Synovate, in 2009, 63% of customers were in the 45-55 bracket. In 2012, 60% of customers were in the 25-44 age group and 21% in the 45-55...
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