TATA NANO-THE MODEL T FOR THE
TWENTY-FIRST CENTURY?
FOCUS NANTAI
FOCUS
NANTAI
INTRODUCTION
• Tata Nano is the cheapest car in the world.
• It is manufactured by Tata Motor Limited, the largest
automobile company in India.
• It's also nation's third-largest automobile maker with
sales that have risen to more than 2 million today.
• Mr Ratan Tata envisions that Tata Nano to become a
“People’s car” which is affordable by almost everybody.
• Within the first two days of lunching, it has received
5500 booking. The figures keep increasing every day
since the launching.
INTRODUCTION
• According to Ratan Naval Tata (Chairman of Tata
Group), the need for an innovation like Nano has got
to do something for the people of India and transport.
• Unavailability and poor quality of mass transport is a
common problem in India.
• In a two wheeler, father driving with elder child
standing in front and wife behind holding a baby is
norm in this country.
• Thus, this is a relatively an unsafe mode of
transporting for a family.
• Thus, with this in mind Tata Nano was created as a
safer form of transport.
Comparison analysis of Nano with
other cars
TERMS
TATA NANO
HYNDAI
SANTRO
MARUTI 800 MARUTI
ALTO
CHEVORLET
SPARK
ENGINE
624cc
2cylinder
inline, 4
speed
manual
10866cc
4cylinder
3valves
cylinder, 5
speed
manual/4
speed at
796cc
3cylinder 2
valves
cylinder ,4
speed
manual
796cc
3 cylinder 4
valves
cylinder,5
speed
manual
955cc
4cylinder,
2valves
cylinder
TOP SPEED
106km
145km
108 km
138km
153km
FUEL
EFFICIENCY
25kmpl
claimed
12.5kmpl
15.72kmpl
14.85kmpl
16.45
Current Situation
 Tata Motors was established in
1945, when the company began
manufacturing locomotives.
 The company manufactured its first
commercial vehicle in 1954 in
collaboration with Daimler-Benz
AG, which ended in 1969.
 In March 2008, it finalised a deal
with Ford Motor Company to
acquire their British Jaguar Land
Rover (JLR) business, which also
includes the Rover, Daimler and
Lanchester brand names. The
purchase was completed on 2nd
June 2008.
Product & Promotion
•
•
•
•
•
Stylish and comfortable
Fuel-efficient engine
Meets all safety requirements
Promotion Tag line
Though the one lakh price tag is not fixed by
TATA group, it was the word of mouth of
people which fixed that range. This
expectation of people creates a big challenge
for the company.
• Target costing method
• Penetration pricing
• Low pricing policy with minimum profit
margin
‘Have Fun, Pay Less, get more with Tata Nano’
TARGET MARKET
• The company is targeting lower & middle
income group with family!
• First-time buyers of car (fresh graduates)
• Motorcycle owners.
• Two Wheeler Market
• Used Cars Market
• second hand car user
SWOT analysis
STRENGTH Price, mileage, style, brand name, all weather vehicle,
first innovation.
WEAKNESS Fiber body, low suspension power,
low engine capacity, light vehicle,
not suitable for hilly areas, delay due to singur
violation.
OPPORTUNITY
THREAT
Bikers can be motivated, auto rickshaw
& second hand market can be motivated.
Other competitors (Honda, Maruti , Tara tiny) not ecofriendly, Govt. may come with new rule.
What makes Nano so cheap
Break even analysis
•
•
•
•
Break even analysis indicates that 3369 unit or $ 46,168,776 will be required in monthly
sales revenue to reach the break even point.
Table: Break Even Analysis
Break even analysis :
100000
90000
80000
70000
60000
50000
fixed cost
40000
total cost
total revenue
30000
20000
•
•
•
•
Monthly unit break even 336910000
Monthly sales break even
0
$46,168,776
Monthly unit production
6083
1000
2000
3000
4000
5000
6000
7000
Difficulties, risks, & Drawbacks
•
•
•
•
Body of the car is made of plastic.
The Fuel tank capacity is just 30 ltrs
There is some cases of car catching fire
Lack of all safety features such as no disc brakes,
engine is on the rare side so head on collision
will have a greater impact on passenger, body is
made of superlight material almost resembling
fiber material
• Slow sales resulting less than projected cash flow
• Unexpected and excessive cost increase
compared to the forecasted sales.
• Significant economic downturns
Q1) Does the so-called one lakh (100,000 rupees) car really have potential beyond
India? What criteria should Tata Motorse use for deciding which countries to enter?
Should Tata also launch the Nano in developed countries? Why & why not?
The “one lakh car” have a potential in India…
• India represent a real potential for automobile market because of its
One billion population.
• Indian’s automotive market can rival the U.S., China and Japan...
• The need for an innovation like Nano has got to do something for the
people of India and transport. Unavailability and poor quality of mass
transport is a common problem in India. Because of unsafe mode of
transporting a family. So, with this in mind Tata Nano was created as a
safer form of transport.
• India's car market is a huge draw because car penetration is just seven
per 1,000 people, compared to 550 per 1,000 in such countries as
Germany or 476 in France, according to the Society of Indian
Automobiles. Thus, it represent a real opportunity for the one “lakh car”.
Yes, Tata should launch the Nano in developed
countries…
• World is getting tougher day by day being unique is a
competitive advantage. Expectations to Nano has proved
this.
Why people would buy Nano in developed countries….
• Its low price. And people (low income & middle class) get all
facilities in affordable price.
• Its look very attractive and available in many colors.
• Its 20% more species then other low price car in India.
• After buying Nano company serve all facilities through his
own service center.
• We provide direct car loan facilities through your nearest
bank like SBI. United bank of India and many more.
Q1) Does the so-called one lakh (100,000 rupees) car really have potential
beyond India? What criteria should Tata Motorse use for deciding which
countries to enter? Should Tata also launch the Nano in developed countries?
Why & why not?
No, Tata should not launch the Nano in developed
countries…
• The biggest problem facing foreign manufacturers is establishing a
dealer network in America, but Tata already has two because it
owns Land Rover and Jaguar.
• Example of USA: The Nano lacks U.S. federally required safety
equipment such as air bags, and the engine would have to be
approved for U.S. emissions standards.
• "Based on the Yugo experience from 20 years ago [when Orlando
native Malcolm Bricklin imported the Yugoslavian car for $3,995].
We believe that Americans would give a $5,000 Nano a try”.
 "Some people don't care whether their car is sophisticated, so long
as it's new.
 The perceived advantage of a new car is reliability -- and if the
Nano doesn't have it, customers would soon abandon it, just as
they did with the Yugo."
Q2) What challenges do you envision in launching the
Nano?
Before envisioning the launch of Nano, we need to
be aware of :
•
•
Nearest Domestic Car Rival: Maruti 800, part of
Japanese-owned Suzuki Maruti stable whose base
model sells for about 4,800 dollars -- nearly double
the price of the Nano.
Nearest International Rival: China's Chery QQ
which retails for 3,600 dollars.
•
We will envision to launch the Nano is European
Market, and in developed coutries such as USA…
•
Example: 1st step in international
market- 2009, marked the 12th year of
Tata motors participation in the Geneva
motor show.
•
The company presented the Tata Nano
Europa, intended for future launch in
select international markets.
• We will opt for cost-effective and innovative use of media.
• TATA motors will share promotion of Tata brand with its multiple
bank partners.
• TATA team is working of Nano news in papers, Nano breaks on
radio, nano appearing in form of massages or ticker news on TV,
online nano games,nano chat room on the net nano pop-ups on
major websites and nano conversation on facebook,orkut and
blogspaces.
• Also available will be a hole range of nano merchandise like
baseball caps,T-shirts and key-chains, among others.
• We will make transport easily available to common man in India
(small/affordable/Stylish).
• The car itself is expected to boost the Indian Economy as well as
expand the Indian car market by 65%, according to rating agency
CRISIL
Q3) How should the Nano be positioned? Would you apply the same
positioning strategy in, say, India &Germany or would you adjust it? If so,
why & how?
How should the Nano be positioned?
• Tata Nano will position itself as the world
cheapest car and yet does not compromise the
quality, safety and environment.
• This positioning will be achieved by leveraging
Tata Nano’s competitive edge: industries
experience from the parent company Tata Motor
who has been in vehicles industries (commercial,
passengers & utilities) since 1945.
• Tata motor has good supplier-manufacturer
relationship with more than 100 components
Q3) How should the Nano be positioned? Would you apply the
same positioning strategy in, say, India & Germany or would you
adjust it? If so, why & how?
In Germany we would adjust our positioning strategy…
• First, we can plan to export our Tata to Germany. a no-frills
Nano, the world's cheapest car.
• In India, our price would be 2,500 EUR but would cost
about 9,000 EUR in Germany and even at that price it
would still be the cheapest new car available in the
Germany.
• A low price alone won't be enough; the Nano will have to
perform at least a little bit like a "proper" car.
• The Nano need to adapt to Germany’s required safety
equipment such as air bags, and the engine would have to
be approved for Germany emissions standards.
• "Some people don't care whether their car is sophisticated,
so long as it's new. Thus, we will offer a new car the
perceived advantage of a new car is reliability.