The Tata Motors – An Introduction
As part of the Tata Group, Tata Motors has been a strong part of the Indian history. With many successful launches of both commercial and passenger vehicles such as Tata 407s, Tata Sumo and Tata Indica, Tata Motors finally decided to launch a passenger vehicle that will set a new trend of “Easily Affordable” passenger vehicle – The Nano. We try to view this amazing story from a lateral point of view and understand what went wrong and what could have been done to this amazing car.
Tata Nano was launched in India, targeting the families who use bikes as a form of travel. It was designed to allow the families to have a more comfortable, safe means of travel. Price was also a factor in the development of the car and it was supposed to be the most affordable car in the world. It was supposed to have a price tag of one Lakh Rupees. The Making of Tata Nano Tata Motors had a formidable challenge at their hands of making a car that costed only one lakh but had all the necessary and essential features. This was reflected in the making of the Nano. All the non functional parts were eliminated, the essential parts were redesigned to reduce cost like the spark plugs, engine etc. Bosch engineered the spark plugs based on motorcycle spark plugs. The engine was completely made out of aluminium. The car was designed to be utilitarian. The car reflected the same where all the feature ensured functionality but at the expense of looks and aesthetics. The initial car didn’t have Air Conditioning System and the hatch door was missing.
What made the difference in the product?
Tata Motors also made significant efforts outside the product to ensure that the costs do not overrun. The entire design of the product was made modular. The 60 odd suppliers who made the essential components for the product were positioned very close to the assembly plant of Tata Nano to reduce the manufacturing costs. The options available in Nano were very few and hence the costs were down. This concept resonated with Henry Ford’s statement “Any color is okay as long as it is black”. The manufacturing processes were highly standardized as a result. Tata Motors also worked closely with the suppliers to reduce the number of components and thus keep the costs under control.
The Marketing of Tata Nano
Tata Motors launched Tata Nano in the year 2009 creating new benchmarks and standards in the automotive industry creating a strong ripple that resonated and created huge publicity and awareness for the product throughout the world. With a price tag or Rs.1 Lakh or approximately at $1500 at that time, it created a huge hype. People thronged the dealers to pre-book the Nano and as a result of that, about 203,000 orders were obtained which generated around $501 million dollars. The marketing team focused on the price tag of the market projecting the affordability factor of the car. They highlighted the utilitarian features and termed it as a family car. These efforts coupled with the already hyped awareness worked out well for Tata Nano – until the fall of the product started.
The Problems for the Car
The fall of the Nano Problems arose for Tata Motors from all aspects with regard to the release of Nano.
The originally Nano plant in West Bengal has to be dropped because of political issues and the entire manufacturing line has to be shifted to Gujarat. This delayed the release of Tata Nano significantly. There was even more trouble for Tata Motors started as soon as the Nano was released. They were not able to forecast that there will be huge number of pre-bookings for Tata Nano. Because of this, there was a huge delay in waiting period since the installed capacity was only 60,000 units per year. This was the starting point of the trouble. There were a few cases where the car caught fire in the normal course of operation.
This created serious safety concerns and had huge negative publicity. PR of Tata Motors didn’t handle this very well and this led to a loss of trust on the product. The world misinterpreted the “Most Affordable Car in the World” tagline as “Cheapest Car in the World” and the same was publicized in the Press media. This didn’t go well in India where the car was seen as a status symbol. This can be explained with the Hofstede Dimensions for India where it had a score of 77 in Power distance and 55 in Masculinity which signifies that People tend to buy products that showcases Power and emotion. Tata Nano came out as a Cheap, Utilitarian car in the eyes of the people. This washed out the product and sales dropped to the floor.
The Recovery in Process – Tata Nano GenX
Tata Motors is trying to rectify its mistakes and has launched new models like Nano Twist targeted towards the college kids by branding it as fun and peppy. In the middle of 2015, Tata Nano GenX was released with a complete overhaul on the aesthetics department. It was also equipped with CVT automatic and better fabrics on seats. It also came with a functioning hatch door that enormously increases the value of the car. There has been changes done to the front and rear bumper to make the car look more attractive. This is done to target the youngsters and young office-goers with better looks of the car. It is also mentioned that the car provides a high fuel efficiency of 21.1 kmpl. This coupled with better looks are sure to boost the sales of the Nano.
Conclusion of the Analysis
Tata Motors had a very promising product idea in its hand but forgot to listen to its consumers when the Nano was developed and marketed. This lead the Nano to the brink of a complete failure. Tata Motors however realized its mistake and is rectifying them. New features are added and existing ones are improved on the Nano. It is also being re-positioned and is now targeted towards a younger audience.
Thus the author believes that these promising actions by Tata Motors will lead to a slow but sure regain of sales and success of Tata Nano , the most Affordable car in the world.
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