The Tata Motors – An Introduction
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. Read further to know the brilliance behind it, what went wrong, and what could have been done to save this amazing car!
Tata Nano was launched in India to target families who use bikes to travel. Its design allowed the families to have a more comfortable, safe means of travel. Price played a crucial factor in the development of the car. It was meant to be the most affordable car in the world, with 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 cost only one lakh but had all the necessary and essential features.
This reflected in the making of the Nano. All nonfunctional parts were eliminated and 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 car reflected the same where all the features 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 modular. The 60 odd suppliers who made the essential components for the product were positioned very close to the assembly plant of Tata Nano. This reduced 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 $1500 at that time, it created a huge hype.
People thronged the dealers to pre-book the Nano resulting in about 203,000 orders generating around $501 million. 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 concerning the release of Nano. The originally planned Tata Nano plant in West Bengal got dropped because of political issues and the entire manufacturing line was then shifted to Gujarat. This delayed the release of Tata Nano significantly.
They were not able to forecast that there will be a huge number of pre-bookings for Tata Nano. Because of this, there was a huge delay in the 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 in the product. The world misinterpreted the “Most Affordable Car in the World” tagline as “Cheapest Car in the World”. To make matters worse, Press media publicized the same. This move didn’t go well in India where cars were seen as a status symbol.
This scenario is explained with the Hofstede Dimensions for India where it had a score of 77 in Power distance and 55 in Masculinity. This metric signifies that People tend to buy products that showcase 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 tried 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 came 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.
The front and rear bumper were changed to make the car look more attractive. Youngsters were targeted 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.
The Final Note
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 leads the Tata Nano to the brink of a complete failure. Tata Motors however realized its mistake and tried to rectify them by adding new features and improving existing ones. It also repositioned the car targetting 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.
UPDATE: As of February 2019, the dealerships in the country stopped selling the car with the plants stopped producing more units. Thus marking the demise of this brilliant car.
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