Case Study Analysis

Planning Hurdles for the $2,500

Nano Car
Leadership Perspective

Introduction

TheTataNanoisacitycarmanufacturedbyTataMotors.
50milespergalooncarwasdesignedtolureIndia'sburgeoning
middleclassesawayfromtwo-wheelers,itreceivedmuchpublicity.
AfterhavingsuccessfullylaunchedthelowcostTataAcetruckin
2005,TataMotorsbegandevelopmentofanaffordablecarthat
wouldappealtothemanyIndianswhoridemotorcycles.
ThePoormansCarRs1lakh.
CaughtattentionofHyundaiandRenaulttomakelowcostcars.

A car that is available for just $2,500 or a little over one

lakh Indian Rupees was under investigation by Tata
Motors due to reports of electrical fires.
There are reasons for its failure.
The problems all began when there was an agitation and
the plant at Singur had to be closed down.

Why was Singur in

the news with regards
to TATA NANO?

Problems Faced
Cars introduction came when the companys earnings fell in
mid 2008.
Stock price was hurt after acquisition of Jaguar and Land Rover.
The rise of price of Raw materials.
40000 protestors in singur complaining about abduction of
farmer lands.
The company had to shift the Nano project to Sanand in
Gujarat on October 3, 2008, following intense protests against
acquisition of farrmlands, led by Mamata Banerjee's Trinamool
Congress.
They demanded that the land should move back to the
agriculturists and giving the money which they had paid at the
time of land acquisition.
Couldnt operate in hostile situation in Kolkata.

Contd..
The relocation lead to delay of
the Nano Car.

Availability of labours in Gujrat is less when

compared to Kolkata.

Postpone of the release of Nano made competitors

bad mouthing the NANO.

Major Drawback

Crash safety
In 2014 a Nano was crashed
forNCAPbyADACin Germany. Despite Tata's
claim that it was expecting 4 stars, the Nano
actually achieved zero stars.

Key Concerns

Safety

Emissions

Congestions

OVERCOMING THE PROBLEMS OF

TATA NANO
JAGUAR,LAND ROVER ISSUE: The move was also a
significant departure for Tata Motors, which, until then, had
experience mainly in making trucks and commercial vehicles.
Well, three years on, sales of Jaguar Land Rover, under the
Tata group, have made a spectacular rebound. By the end of
March 2011, 80 percent of Tata Motors' $2.04 billion annual
profit came from the JLR unit alone.
NO CHALLENGE FOR NANO: No other car manufacturer in
India has come close to matching the aggressive pricing of the
Nano.
UPGRADED VERSION AND NEW ADVERTISEMENTS: They
had a good marketing strategy that reached millions of
customers.
CHANGE FROM PETROL TO DIESEL WHEN PRICE OF
PETROL INCREASES.

Conclusions and Learnings

In appropriate Demand Forecast and Planning
Tata's business model fits to push type model, mass

production. According to this model the sequence is:

design-make-sell. Tata failed at the design stage.

We have seen that all the reasons for failure are already
at this stage (raw materials, European standardization,
the use of diesel and non matching infrastructure).

Once planning fails, the sequence is broken, causing a

drastic drop in sales and the failure of Tata Nano project.

Thank
You