3. Surprise !!!
• The Nano has passed EURO- NCAP. Car
• It’s 4 star rated car.
4. Why did Tata Nano failed?
• Running cost .
• Lack of trust.
• No alternative fuel option.
• No resale value.
• Trial by fire
• Ratan Tata`s dream, cheapest car in the world was in
news but for all bad reasons.
• Cars were catching fire every now and then.
• After being tested for millions of kilometers the
NANO was launched, but all in vain people still
thought the 1 lakh rupee dream was not reliable.
• Nano was always projected as alternative of
two wheeler and not compared to nearest
• Tata did not show about safety features in
their advertisement . They projected their car
as an alternative to 2 wheelers not as a car.
7. Running Cost
Jan, 2009 40.62 ---- Feb , 2010 47.43 ---- May 2011 63.37
Considering Nano fuel efficiency at 20km/L the fuel cost back in 2009 was Rs. 2
/km . But considering todays situation when fuel prices are around Rs 72 a liter the
running cost are around are around 3.5 Rs /ltr.
8. Lack of trust
• Tata car were never considered as trust worthy.
• Tata car were always considered as cheap
alternatives to precisely engineered Germans
and hugely reliable Japanese cars.
• Same perception was carried forward to Tata
9. No alternative fuel option
Nano had only 650CC two cylinder petrol
engine on offer.
No diesel option.
Being a rear engine car no way of CNG
10. Resale value
• When it comes to re-sale value as well, the
Nano falls way behind any of the other cars
that are available in India like the Chevrolet
Spark and Maruti Alto.
12. Biggest USP have acted against it.
• No Pride of ownership:- The “aam aadmi” read “middle and
low middle class” in India. It is this group that was supposed
to form the biggest customer base for the Nano. However, the
cheap car propaganda has done more harm to the Nano than
good. As consumer segment was believing that owning a
Nano would lower their status in society.
14. Competition -
• You'll note that in the advertisements above there's always either a couple
or family on scooters or road bikes alongside. Tata is essentially trying to
convince people that the Nano is a safer, better option than these. The fact
remains many owners of other road bikes consider their bikes a preferable
option in terms of style and speed.
• Scooters are not considered a style
symbol for the most part in India unlike
the in the US but the Nano seems to
have become the 'scooter of cars' in
terns of branding thus negating the
advantage they were trying to gain. When
people do eventually feel the need to
move away from a scooter many will
probably try to go for the next best
option beyond the Nano.
15. Inadequate dealer network
• Ratan Tata was quoted as saying "We never really got our act
together...I don't think we were adequately ready with an
advertising campaign or a dealer network" . The Nano did
not have a large enough dealer network in the rural areas and
smaller towns where the affordability branding was more
likely to work. The lack of dealer networks meant they could
not capitalize on the initial enthusiasm and interest.
16. Advertising campaign
• Advertising campaign - The advertisements of the Nano had a weak theme catering again to the
theme of affordability. Especially with cars people want to own something they can aspire for and
be proud of. For example Case in point - I drive a smaller Chevy, I can afford a larger Honda but
would love a shiny new Boxster. The closer you can make the Honda or Chevy feel like the Boxster
the more likely I am to buy it. Note that by 'feel' I do not mean how exactly it drives (though I would
hope it drives well) but how the branding of the car makes me feel about it when I'm in it or around
it. Even the audience that can only afford a Nano wants to be sold something better. They want to
feel excited about it. Here is one sample advertisement of the Nano that shows a middle class
family of 4 driving through the streets with the stress being on traditional family values.
Here's another slightly different example -
• This one talks about how the guy laments that he missed out his girlfriend/wife's singing in the
years he used to drive a scooter/road bike. Result - The focus on safety and relative comfort over
the scooter. Nothing exciting or incredibly desirable.
• The Nano as currently ma
There probably is a small segment of the population that this appeals to but most small car owners
are looking for campaigns that portray the car as something with style more in terms of the
Volkswagen ads we see today or even the less popular Fiat 500.
that. A city like Mumbai
well connected public tra
18. Communication Complacency Continues
• The communication complacency was evident elsewhere. Once demand started to fade, Tata Motors
might have helped sales had it disclosed the easy availability of the Nano (because of the cancellations
and delays). The general perception was that consumers would have to wait two years for delivery. This
would not have been an easy choice for the company. After the huge pre-launch hype, it would have
caused public embarrassment to admit the car was not moving. But this has resulted in an ironic situation,
observers have noted: New buyers are not coming forward because they feel they don't stand a chance of
getting delivery until the company sets up additional capacities.
• Ray, however, defends the Tata's approach. "[The Nano] was not available off the shelf until we started
open sales," he says. "There is no question of sluggish sales. Until August , we were only delivering
pre-booked cars. I was not selling openly because I did not have the capability to. Despite that, had I
started advertising, would I not be wasting money? So in classical marketing style, I have brought in
advertising only when it was required -- initially print and now, television."
• What really happened to the original 200,000 bookings? Industry observers say there are no clear
answers. Some orders were cancelled initially. Others were cancelled later. But there is a large percentage
that falls under "delayed delivery." Indian consumers have a lottery mentality: People apply for things they
don't want, expecting to sell them at a premium when they get delivery. "Dealers expect early-bird owners
[of the Nano] to command a hefty premium of Rs. 30,000 [nearly one-third the price of the car] because of
the initial shortage in supply," reported economic daily Business Standard, a few days before the launch.
"We cannot comment on speculative buying. There is no way for me to know what the intentions of
people buying the Nano are," says Tata's Ray.
• Experts concede that part of the problem was not of the Tata's making. Because the Nano plant had to
move from West Bengal to Gujarat, production timelines were difficult to maintain. With not enough cars
being made, the company felt it didn't have to advertise or even set up efficient distribution channels.
19. what can be done to revive Tata Nano?
• Provide an alternative fuel option.
• Repositioning of the car in the consumer
• Opening of Tata Nano for commercial
20. Alternative fuel
• Tata should introduced diesel engine for Nano.
• Considering the fact that Tata is a innovative
company and it has been making small capacity
diesel engines for its mini trucks the R&D costs
should not be high.
Tata can also consider a Hybrid
option for Nano which they are
already planning to launch in export
• Nano was always projected as an
alternative to a 2-wheeler which has to
be changed if Tata has to increase the
volumes of its CAR.
• Nano can be projected as a second car
which can be used for day to day city
22. The Commercial Alternative
• To push the volumes Tata can also offer Nano to the
• Even the cheapest auto on sale in India costs
approximately the same as the Tata Nano.
• This is successfully done in
many export markets like