In 2008, I was in Heidelberg, Germany during the Tata Nano launching, some of my European friends were curious about this small car. There was much buzz about Indians had invented a small car which cost just around 2000 Euros (around 1 lakh INR at then exchange rate), we would love to own the car if it is launched here, responded both of them. Even most of European players hinted at Nano capturing major market share, mainly based on assumptions at primary information. However some of my friends at the R&D department of BMW in Munich had expressed their doubts about safety parameter of vehicles.
Back home, Nano was receiving a tremendous response. At Auto-Expos the Tata stall was often over crowded, as people rush into to get a view of this car. Tata Nano was a great concept which fulfills many middle class dream to have cars mainly due to the factor that comes inexpensive and fits well in their budget. The concept was mainly based on product position and gap analysis. Somehow, some major parameters of buying cars has not been considered as it was supposed to.
At the same time, the Indian Two wheelers industry was also put under pressure due the response Nano was getting at the time and boardrooms were full of discussion about Nano. These responses prompt other OEMs to announced entry into the small car segment.
A keen observation on how Nano’s journey started and where it stands now put forth a lot of questions. In the last 5 years Tata Motor had taken each and every possible efforts to promote this product via big advertising campaigns as an attempt to create new target segment etc. But the ROI remains sluggish and now Nano could be well seen as a declining product. There difference of 1 lakhs rupees has increased for Nano price since its initial launch, an increase of around 100%. The product concept, competition and product position has all been completely changed since its initial launch. ACG also keep eye on this issue and after 2 years extensive study by ACG team; released the premium report “Tata Nano – Unveiling a Success Strategy”.
The 'Tata Nano' Concept
Tata Nano has been often labeled as ‘Cheap Car’ by buyers which itself is a big set-back. The attempts to compete against Two Wheelers didn't pay off since the advantages customers find in two wheelers were much more superior. Eventually pricing also became the villain as the low-end version starts at 1,5 lakhs ex-show room price; customers would prefer Maruti Alto or similar models which is just priced at Rs. 40,000 more than Nano.
Tata Nano is currently available in Petrol and CNG versions.
Three variants are available for petrol version, price starting at Rs. 1,50,00 which fall across Rs. 2,23,500 for top end model.
CNG models are available in two versions starting at Rs 2,40,145 and Rs. 2,65,260.
Exchange offer: Nano Exchange Offer (On select models only)
In one of the recent attempts to boost sales Tata introduced exchange offer for New Nano by exchanging their two wheelers.
Tata Nano sales analysis:
Nano could not performed on its defined parameters as expected; even after promoting heavily on print, Digital and Electronic media.
The concept that lead to the evolution of Nano is good, but somehow it is evident that proper analysis on ground level was completely missing. Concepts merely based on product gap often doesn’t work. All parameters should be consider before launching. Even cultural facts on target groups should be analyzed.
On the contrary, in Europe BMW Mini and Mercedes Smart are successful products because it fits in well with their individual life style or small family size. A ‘show-off-culture’ is mostly absent in the community and more emphasize is given to comfortable driving with no parking issue. Since products belonging to small car segment gain good brand reputation.
In India, majority of the families are around 4 to 5 members for which this car does not suit. People like to have bigger cars just like in USA. Also people like to drive impressive expensive cars.
ACG found that Nano needs to change its segment, product perception and pricing. Instead of competitive with two wheeler segment, it shall enter into small car segment. The definition of Small car segment is different than small cheap car segment. There is good potential growth in the small car segment.
With re-launch and and re-branding, Tata could make Nano successful in this segment. ACG has done a detailed study on the prospects. The analysis “Tata Nano – Unveiling a Success Strategy” is now available for purchase.