Tata Nano Section B -Group 4

7/27/2019 Tata Nano Section B -Group 4

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THE PEOPLES CAR

Tata Nano-A Giant Leap for a small car


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Mr. Ratan Tata explaining his Vision"I observed families riding on

two-wheelers the father driving

the scooter, his young kid

standing in front of him, his wife

seated behind him holding a little

baby. It led me to wonder

whether one could conceive of asafe, affordable, all-weather form

of transport for such a family. We

are happy to present the

Peoples Car to India and wehope it brings the joy, pride and

utility of owning a car to many

families who need personal

mobility."


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Introduction

Indian Automobile Industry

7th largest in the world

Contributes to 22% of Indian GDP

Handsome Turnover (` 3.285 Crores) & Export (` 495 Crores)in 2010-11

Fastest growing passenger Car Market in Mid 2011

Luxury Car Market to grow at 10 times whereas passenger

vehicle segment to grow 90 Lakh units by 2020

Favorable growth due to low vehicle penetration in the country


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Market Share by type of vehicle

76%

4%

4%

16%

two-wheeler three -wheeler commercial vehicles passenger vehicles


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Automotive Economic Ladder:2-Wheeler to Cars

0

500000

1000000

1500000

2000000

2500000

3000000

Price(Rupees)Nanos Entry at 110%

333% 45% 136%

140%

41%


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Tata Nano

Idea generation

To have a Safe, Affordable, all-weather form of transport for

nuclear Indian family

Opportunity at families owning 2-wheelers

Price tag of`1lakh

Idea Screening

Upgrading three wheelers to suit the design

Reducing the amount of raw material

Low cost Indian labor


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Contd.

Concept development & Testing

Target- pricing strategy

Innovative idea to deliver value incurring lowest cost for a cost

effective car

Bought 1000 acres of land in Singur due to good incentives,

resources & ease of transportation

Due to compulsions, shifted to Sanand in Gujarat

Full frontal crash & compact testing

Worlds cheapest car Introduced in March 2009


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Product defects & Actions

Before Launch : Issues in air conditioning, pick up & suspension

After Launch : Ruptured fuel lines in cases of full fire & faulty

wiring in the combination switch area in case of smoke

This led Tata motors to announce safety upgrades


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Sales performance-a bumpy ride

Delhi auto expo in January 2008 created pre-launch anxiety

among consumers

In mid august 2008, work was ceased at singur & this led to

unsatisfactory sales as against good pre-sale orders

The highest sales being in April 2010 & lowest in November

2010


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STP

Segmentation

Demographic: Family size & income

Behavioral: benefit

Target Market

Two wheeler segment

Second hand car user

Middle income people group

Positioning

Peoples car


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Marketing Mix

Product

Good brand name

Small yet comfortable

Better warranty than competitors

Price Offering lowest price in passenger vehicle

EMI payment option with 15000 down only


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Contd.

Promotion

Delhi auto expo platform

Upgrading dealers showroom to create suitable ambience

Positioned as peoples car

Place Wide distribution network across country

Huge network of dealership, sales, Services & spare parts


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SWOT Analysis

STRENGTH WEAKNESS OPPURTUNITY THREAT

Tatas Goodbrand name with

diverse product

portfolio

No power steering Fastest growingpassenger car

market in India

Dense traffic inIndian cities

Enviable

distributionchannel

Team lost

momentumbecause of the

lost land

Low vehicle

penetration in thecountry

Other low cost

alternative carscoming up

Huge network of

dealership, sales,

Services & spare

parts

Current base

price is 50%

higher than

promised price

Growing inflation

Good value

proposition

Inadequate

buying behavior

analysis of target

segment

Rising oil prices


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Contd.

STRENGTH WEAKNESS OPPURTUNITY THREAT

Uniquedashboard design

Quality & safetyissues

Negative mediapublicity

Vast technology

know-how of Tata

team leading to

first innovation

High lead time of

6 months initially

Small size

All weather

passenger car in

`1Lakh

Price tag beingwithin the reach of

2-wheeler owner


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Reasons for the failure

Lack of buying behavior analysis

Not living to the promise of`1 lakh base price tag

Two-wheelers are still best in peak-hour city traffic

Negative media coverage positioned Nano in a different way

Using relatively inferior raw material such as industrial glue &plastic spare parts

The rear mounted engine

Fear of quality & safety issues thinking that best parts are not

installed to meet the promise of low-cost


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Documents

Tata Nano Section B -Group 4