CASE STUDY: TATA NANO–ENVIRONMENTAL ANALYSIS
In 1868, Tata Gamsi founded Tata group. It is the largest conglomerate in India and is
owned by Tata sons. Tata Motors is a leader in manufacturing of commercial,
passenger, military and electric vehicles. It is also the world’s 4th largest truck and
2nd largest bus manufacturer by volume. In January 2008, Tata Motors introduced
Tata Nano, dubbed as the ‘People’s Car’ and also known as the world’s cheapest car.
The car was launched in March 2009 which created a significant impact in the Indian
automobile market. Tata Motors Ltd. is one of the few companies which has its own
R&D centres. It has established an engineering research centre at Pune (with a
strength of around 3,500 personnel).
The main target group of customers for Tata Nano are the lower- and middle- income
families in India, many of whom resisted purchasing four-wheelers mainly due to the
price affordability and maintenance cost. Launching of Tata Nano gave an opportunity
for these groups to purchase a car within their means.
During the initial launch, Tata Nano was priced at about rupees one lakh. In December
2008, the cost of the car increased significantly due to higher raw material costs.
Table a: Passenger Car Segments in India
Segment Type Length
A1 Mini Up to 3400 mm
A2 Compact 3401-4000 mm
A3 Mid-size 4001-4500 mm
A4 Executive 4501-4700 mm
A5 Premium 4701-5000 mm
A6 Luxury Above 5000 mm
Table b: Awards Tata Nano Received
Awards Awarding Organisation Year
Indian Car of the Year (ICOTY) Instituted by leading automotive magazines in 2009
Award. India, in association with JK Tyre
Business Standard Motoring Business Standard 2010
Indian Car of the Year
Good Design Award Museum of Architecture and Design together 2010
with The European Centre for Architecture, Art,
Design and Urban Studies
Gold Prize in the Best New Edison Awards 2010
Product segment
Best Car Advertisement of the Year Bloomberg, UTV, Autocar India Awards 2011
Award
Further, in 2013, Tata Nano was rated as the most trusted 4-wheeler brand by Brand Trust Report India Study.
Tata Motors was so confident about Nano that they thought this is going to be a massive success. But it failed and
became one of the most disaster products in the history of marketing
.
Table C: TATA Nano Sales Figure (2017–2018
Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun.
Month
2017 2017 2017 2018 2018 2018 2018 2018 2018
Tata 57 121 94 62 52 29 42 20 3
Nano
GenX
Tata Nano Failure Reasons
Tata Nano projects itself as the cheapest car. Nobody wants to drive the cheapest car. Buying a car is related to
social status and prestige in society. Ratan Tata says: “It (Nano) became termed as the cheapest car by the public and,
i am sorry to say, by ourselves, not by me, but the company when it was marketing it. I think that is unfortunate.” So many
Nano cars catch fire. This created a complete buzz in media. Despite the low price, everyone hesitated to buy them
because of the incidences of fire. After the announcement of Nano, the second-hand market of cars faces a drop in
price by 15% to 20%. New cars like Alto 800, Maruti 800, Indica, etc., also have to reduce the price. People called
it a The vision of Tata was an affordable car that could fit a family of four. But, in reality, it was not fitting an
Indian family of 4 with ease.
QUESTIONS
(1) What was the vision of Ratan Tata behind the launch of Nano project? How did he analyse the environment?
(2) In spite of extensive research and development programme, Nano was a huge failure. Why?
Tata Nano Failure Reasons
Tata Nano projects itself as the cheapest car. Nobody wants to drive the cheapest car.
Buying a car is related to social status and prestige in society. Ratan Tata says:
“It (Nano) became termed as the cheapest car by the public and, i am sorry to say, by
ourselves, not by me, but the company when it was marketing it. I think that is unfortunate.”
So many Nano cars catch fire. This created a complete buzz in media. Despite the
low price, everyone hesitated to buy them because of the incidences of fire.
After the announcement of Nano, the second-hand market of cars faces a drop in
price by 15% to 20%. New cars like Alto 800, Maruti 800, Indica, etc., also have to
reduce the price. People called it a Nano effect.
The vision of Tata was an affordable car that could fit a family of four. But, in reality, it was not
fitting an Indian family of 4 with ease.
QUESTIONS
(1- What was the vision of Ratan Tata behind the launch of Nano project? How did he
analyse the environment?
(2- In spite of extensive research and development programme, Nano was a huge failure.
Why?
