About Tata Nano

The Tata Nano, one of the most ambitious projects of Tata Motors, started in 2003. It was envisioned by the Tata Group chairman, Ratan Tata himself. He found that Indians lagged behind in car ownership, especially compared to the European Union and the Americas. Just eight or nine in a thousand people owned a car...

The Downfall Saga

The major problem was yet to come with the sales of Tata Motors' much-publicized People's Car witnessing a sequential fall in 2010. In July 2010, Tata Motors sold 9,000 units of the Nano. This fell to 8,103 units in August, 5,520 units in September, and to 3,065 units in October. In November 2010, a festival month during which it is considered auspicious to buy new and big ticket items, the sale of Nano came down to just 509 units (85% drop from November 2009). This was despite the fact that the overall sales for the Indian auto sector rose by 45% in October 2010...

Reviving the Nano

The sequential downfall of the Nano's sales figure compelled Tata Motors to rethink and revisit its strategies. A eight- to ten-member crack team was put in place by Ratan Tata to address the situation. The team took various steps. Addressing Safety Issues As the major threat to the car's image was the fire incidents, engineers at Tata Motors made some changes in the Nanos existing design...Financing Tata Motors Finance (TMF), the Tata Motors vehicle Finance Branch, announced a special finance scheme for the Tata Nano, in which a buyer could get an easy loan with selected documents in just 48 hours... Distribution Reforms It was then the turn of distribution reforms. Beginning July 2009 when dispatches to those who had booked the car started, the company had delivered over 71,000 Tata Nanos by November, 2010...Marketing Communication Last, Tata Motors' initiatives to spruce up the Nano's sales volumes were not just limited to the finance fronts, distribution, and providing additional protection in exhaust and electrical systems in view of some fire incidents...

A Spectacular Comeback
Tata Motors' efforts bore fruit with the sales figure showing signs of a revival after reaching its lowest level in November 2010. Backed by the television advertisements,

provision of additional protection in the exhaust system, extended warranty schemes, incremental rise in sales point in smaller towns, and the introduction of the 90% financing plan through its in-house vehicle financing unit, TMF, this became possible. Sales of the Tata Nano went up dramatically to 5,784 in December compared to 509 units in November 2010...

The Road Ahead

Analysts noted that the Tata Nano had shown upward growth since the setback in November 2010. Encouraged by the positive public response, Tata Motors was thinking of increasing the production capacity for the Tata Nano. The existing capacity of 10,000 units each month in the Sanand plant was planned to be increased to its full capacity of 275,000 cars per year. Many bikers were also warming up to the prospect of owning a new Tata Nano for the price of an expensive bike. Since August 2010, Tata Motors had started the open sale (without any pre-registration) of the Tata Nano and by December 2010, it was being sold in 12 states. The sale of the Tata Nano had since then picked up in five states and the company was also trying hard to reach out to its target customers in other states through its outlets and other access points. Tata Motors was planning on coming out with Big Bazaar like Special Nano Access points so that potential customers could test-drive the Tata Nano. Tata Motors was planning to capture each and every nook and corner of the Indian auto market with open sales by the first quarter of 2011...

What do they do ?They produce very low cost cars to the indian market. Making cars available to a costumer segment that could previously not afford cars.

Customer Analysis in the Budget Car Segment Customer Segment Segment Lower - Middle Class Middle - Middle Class Upper - Middle Class User Intention First Car User Second Car User local market Possibly third car User baba-log First Car User Possibly Third Car User

Lower Class Upper Class

Budget Car Segment Compact Car Segment

Family Car Premium Car Super Luxury Saloon

Segment A1 A2 A3 B2 B3 B4 C1

Description Scooter <75cc 75-125cc 125-250cc Motorcycle 75-125cc 125-250cc >250cc Moped

Share % 2001/02 5 58 12 62 5 1 10

Share % 2006/08 0 10 1 66 17 1 5

CAGR -33.9 32.9 -27.7 14.9 44.8 5.7 -2.7

Customer Motivation Growth is due to rural market demand. Segment Motivation Motorcycle Variations in models, enhanced technology, fuel efficiency Scooter Low Price andInexpensive, Lowmaintenance cost, long lasting, reliable. Mopeds Less fuel consumption, manual paddling, gearless Electric TwoEco-awareness wheeler Reason Demographic changes (growth younger population), economy growth, higher disposal income. Increase in the number of working women who prefers scooter as the mode of transportation Shortage of conventional fossil fuels

A1 A2 A3 B2 B3 B4 C1

Scooter <75cc 75-125cc 125-250cc Motorcycle 75125cc 125-250cc >250cc Moped

Lower Price, light weight, low-fuel consumption, low maintenance cost Lower Price, low-weight, low-fuel consumption, low maintenance cost, higher mileage Powerful engine, self start, gearless, Variations in model, enhanced technology, fuel efficiency, light weight Variations in models, enhanced technology,quality, looks, sporty designs and appearance, speed, better performance Model variations, enhanced technology, sporty and adventurous design and appearance, high speed, Less fuel consumption, manual paddling, gearless

Unmet needs 1. Availability of back gear 2. Flexible height in same model 3. Theft protection technology 4. Safety of the biker rider 5. More powerful head-lights and stronger engines 6. Tubeless Tyres