Tata Nano's Failure To Attract Customers [Tata Nano Case Study]

Tata Nano is a compact vehicle that was produced and showcased by Indian automaker Tata Motors, principally in India, as a modest back-engined hatchback expected to speak to current riders of bikes and bikes — with a dispatch cost of Rs.1,00,000 or $2500. Delays during the production line migration from Singur to Sanand, early cases of the Nano bursting into flames, the impression of the vehicle being perilous, and compromise in quality due to cost slicing are some of factors behind Tata's failure to attract Indians.

Tata Motors anticipated creation of 250,000 every year at dispatch. This didn't happen. Only 7591 were sold for the model year 2016-17. In 2017, Tata Motors said assembling would proceed because of Tata's passionate promise to the project. In 2018, Cyrus Mistry, previous Chairman of the Tata Group, called the Tata Nano a venture in progress with China, with a generation overhaul scheduled in May 2018.

Tata Motors' Nano Initiative
Initial Effects Of Tata Nano
Marketing And Business Strategy Of Tata Nano
Why Did Tata Nano Fail?
Tata Nano's Attempted Comeback

Tata Motors' Nano Initiative

After effectively propelling the ease of Tata Ace truck in 2005, Tata Motors started the advancement of a reasonable vehicle that would speak to the numerous Indians who ride motorcycles. The price tag of this nitty-gritty auto was brought somewhere around getting rid of the most superfluous highlights, diminishing the measure of steel utilized in its development, and depending on ease of Indian labor.

The superfluous highlights include the evacuation of the traveler's side wing mirror, having one wiper sharp edge, having just three fasteners for every wheel, and the expulsion of the fuel filler top from the fuel tank. The presentation of the Nano got much media consideration because of its low cost of Rs. 100,000. The vehicle was promoted as "The People's Car".

Also read : Greatest Indian Entrepreneurs of All Time - Jamsetji Tata

Initial Effects Of Tata Nano

A report by the Indian rating office CRISIL figured the Nano would extend the country's vehicle advertising by 65%, in any case, starting late 2012. However, deals in the initial two monetary years after the vehicle's divulging stayed unfaltering at around 70,000 units. Tata still proposed the ability ability to deliver the vehicle in a lot bigger amounts, somewhere in the range of 250,000 every year, if the need arised.

It was foreseen that its 2009 presentation would significantly influence the trade-in vehicle market, and costs dropped 25–30% before the launch. Sales of the Nano's closest rival, the Maruti 800, fell by 20% promptly following the disclosing of the Nano. It is obscure if the Nano has lastingly affected the costs of and interests for close substitutes. In July 2012, Tata's Group administrator Ratan Tata, who resigned in January 2014, said that the vehicle had huge potential while conceding that the early open doors were squandered because of starting problems. Due to the business drops, just a solitary unit was delivered in June 2018.

Marketing And Business Strategy Of Tata Nano

India is an organization with a larger part of its populace dwelling as a low pay gathering. Purchasing a vehicle is still a fantasy for many families in India. In the year 2008, Ratan Tata reported the dispatch of its new vehicle, which would be a progressive item in the car division. He called it a 1 Lakh rupee vehicle and the same title was used for promotions.

The fantasy of a middle and even lower white collar class family unit to have their very own vehicle woke up with this declaration from Tata Motors. It was hailed to be cutting edge innovation and was commended by international media. BAn entirely unexpected story that unfurled when the vehicle appeared on the streets.

India Customer's Needs

Ratan Tata's flash for the Nano came when he saw groups of 3-4 individuals utilizing a motorbike for transportation. There are a great many bicycles in India and it has constantly presented well-being worries for the general population. In blend with the poor street conditions in India and conveying a full family on a bike, bikers are subjected to numerous mishaps.

His strategical view drove the concept of a low cost vehicle and chose that the 1 Lakh Rupee sticker price will be appealing to the objective market.

Also read : List of 24 Startups Funded by Ratan Tata

Proclamation

At the point when Tato Nano was declared in the long stretch of January 2008, it was over-advertised to be the vehicle of each Indian. The cost of Nano was pegged at Rs. 1 lakh or $2500 by Ratan Tata, the Chairman of the Tata Group by then of time. It turned into a fantasy vehicle for each individual having a place with the lower working class and even the lower class. Anyway, the service of the vehicle additionally raised worries about the blockage on streets that the vehicle would acquire as individuals began to utilize it for everyday transportation.

Strategic Plans

TATA Motors fundamentally segmented and focused on the following sections of the Indian population:

The middle class. Fundamentally the lower white-collar class.
Upper lower class. Normally the bike clients.
Family with 3-4 individuals who have inconveniences while going on a 2-wheeler.

Affordability And Family Friendly Usage

Tata Nano being propelled in the Indian market was an opportunity for the normal man of India to fulfill his dream of owning a vehicle. The promotions and media productions featured the passionate remainder that demonstrated the joy of youngsters when they see a vehicle coming to their home, and the joy on the substance of the relatives who delineated a white-collar class gathering.

The battling Indian classes who had a month to month pay of under Rs.6000 every month and comprised more than 110 million families got the chance to dream of purchasing a vehicle. Mr. Ramesh Mangaleswaran, an accomplice of McKinsey and co., anticipated that in Mumbai alone the 2 million individuals who rode a cruiser ordinary would now attempt to lift themselves to purchase a Tata Nano. It was expected that Tata Nano would make a progressive change in the way of life, uncommonly concerning the substitution of the regular man. It would turn into a face of the Indian lower class, just like the Bajaj Scooter at one time represented the white-collar class.

Also read : Ratan Tata - The Accidental Startup Investor

Why Did Tata Nano Fail?

Ratan Tata stayed faithful to his obligation and the Indian market saw Nano set on the streets in the long stretch of July 2009. At the start, the deals for the vehicle were high. It then began to decay on every month. There are a few reasons of failure which justify Tata Nano's downfall.

TATA nano promotes itself as the least expensive vehicle.
No one needs to drive the least expensive vehicle.
Purchasing a vehicle is identified with economic well-being and distinction in the public arena.
"Cheap" and "lakhtakia" used in Tata Nano's advertising for advancement and showcasing all over India disturbed its image.
The engine was an issue.
There was a buzz in the universal media, "What if Nano becomes successful? It would mean an end to the second-hand car market."

Why Tata Nano Failed?

Problems With The Car

Awful picture of the shoddy vehicle.
Several cars caught fire. Thus, in spite of its low cost, people refrained from buying it.
Media channels covering the news related to Tata Nano underestimated the vehicle. In any case, they were correct.
The car was not fit for sloping territories.
The motor used to make a great deal of clamor, and individuals even compared it with an auto.
Insides were dull with inadequate leg space.
The whole assemblage of Nano was light and prone to damage on even the slightest of knocks.

Also read : How Starbucks Globally Conquered The Coffee Industry

Other Reasons

TATA Nano got around 200,000 appointments at first. This made Tata Motors complacent and it didn't bother about new advertising strategies. New publicity procedures were essential to keep the enthusiasm of the individuals unblemished. But it wasn't done. When the main flame episode was accounted for, the ad system then just looked responsive and upgraded rather then focusing on negative attention.
Nano was viewed as an attraction for individuals who never thought of purchasing a vehicle. It was focused on engine cycle riders, recycled vehicle proprietors, and different families in the lower white collar class gathering. This prompted some degree of opposition. According to the intended interest group, the media and the general public acknowledged Tata Nano as a poor man's vehicle.
Ratan Tata in his previous question and answer sessions referenced that he wanted to position Tata Nano as a 'reasonable, all climate family vehicle".
At the point when Nano later raised its cost to conquer the negatives of the principal model, the cost turned out to be a lot higher. The top-end Model of Tata Nano (2014) was cited at an on-street cost of around Rs.2.6 lakhs in Bangalore. This sort of evaluation with the equivalent Nano model which the poor man likewise claimed, confounded the clients..

Tata Nano's Attempted Comeback

In the year 2013 Tata engines re-propelled Tata Nano with new components and publicity efforts. The re-dispatch concentrated on the following:

Focusing on the young people of the nation, the new Nano had extravagant settings like settings and shading blends, for example, ranch side or experience sports. The ads and crusades this time concentrated on the adroitness factor. The emphasis was, "Why not purchase a Nano when it gives everything at a deep discounted?" It additionally featured the rational advantage of Fuel productivity in another manner.

This time, Tata Nano pursued another sort of crusade altogether. They began to support programs on MTV that energized experience sports and stretched out the crusade on National TV. Like the arrangement Roadies circulated on MTV where the members need to go on a Hero Karizma, they attempted to execute a comparable technique where the members were approached to traverse India in a Tata Nano. This validated the intense with which the vehicle was fabricated.

It concentrated on the passionate parts of a parent, and the car was promoted such that guardians can give their children a Tata Nano as opposed to giving them bicycles; a vehicle is more secure than a bicycle. This would likewise make them brilliant guardians.

Link : https://startuptalky.com/tata-nano-case-study/
Author :- Devashish Shrivastava
July 24, 2020 at 12:00PM
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