September 25, 2011
School of Business, Bangalore
The cheapest road car in the world today is made in India.
When it was introduced in April 2009, 1 lakh units could fulfill only 50% of the market demand.
With 31 patents in design and 37 in technology, and the lowest emission levels among petrol cars in India, the Tata Nano was heralded as the start of an era.
Yet, within a year and a half sales had dipped so much that in November 2010, the company barely managed to sell 500 units.
Sales climbed steadily from that low point and within six months the monthly sales figure touched 10,000 units. But the initial euphoria seemed to be clearly gone.
Studying the turbulent two-year journey of Tata Nano in the Indian markets, ASB faculty, Deepika G. co-authored a case study that was published in the August 2011 issue of Marketing Mastermind.
Deepika worked with her colleague Sriram Rajann at the Indian Business School, Hyderabad to unearth fascinating Nano facts to develop the case.
The case was titled Nano’s Revival Strategies: A Platform for Further Innovation.
Noting the car’s journey in the Indian market, the authors also described its recent successes abroad.
“Nano entered Sri Lanka’s taxi market in June 2011, where it was seen as an alternative to shaky three-wheeler auto rickshaws. It also offered a price advantage over air conditioned cabs. The company will soon begin selling cars in Nepal, making Nepal the second international destination for the Nano after Sri Lanka.”
“Nano also passed the European Crash test and safety standards and is on its way to start making inroads into the markets in developed countries.”
Referring to the unfortunate fire incidents where a small number of Nano cars burned in 2010, the authors highlighted the strong measures put forth by Tata Motors to combat this problem. “The extended warranty and recall for updation helped,” they wrote.
The company also introduced easy access for financing the buying of new cars, new access points, training for sales teams and an aggressive advertising campaign.
Arguing that further innovation will be a part of Nano’s future, the authors highlighted its unique aspects.
“With a mileage of 23.6 km, the Nano is clearly best in its class and India’s most fuel-efficient petrol car. It has more space than its close competitors, thanks to the 2-cylinder aluminium MPFI 624 cc petrol engine which can fit snugly into the rear. Minimum turning radius of 4 km ensures that it can be parked anywhere within seconds and navigate out of rush hour traffic faster than other four wheeler vehicles.”