A project report on tata nano pre launch survey

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INTRODUCTION OF TATA NANO

“Dream-dream and dream, because dream gives vision, vision gives thoughts and finally
thoughts lead to the action". Each letter of these motivational words said by India's former
President Dr. A.P.J. Abdul Kalam goes exactly with Mr. Ratan Tata, Chairman of Tata group, who in
the year 2003, dreamt of producing a safe, affordable Car for the common man. Finally after the wait
of five years, crossing all financial and technological barriers, Ratan Tata kept his promise and
unveiled Tata 'Nano' on 10th January 2007, at the 9th Auto Expo 2008 in New Delhi. Tata Nano,
cool & smart, launched by Tata Motors is world's cheapest Car with a price tag of $ 2500

The Making Of Tata Nano

Ratan Tata rolls the window down and talks about the vision and conviction, the innovation and
improvisation, and the leap of faith that went into creating the People's Car.

The launch of the People's Car by Tata Motors is a defining moment in the history of India's
automotive industry. For Tata Motors, the car - christened the Nano, because it is a small car with
high technology - is the next big step in a journey that began with the Indica. For the Tata Group, it
is the realization of a pioneering vision to create a breakthrough product globally that rewrites the
rules of the small-car business.

What does this path-breaking Endeavour really mean for the Chairman of the Tata Group, in many
ways the inspiration behind the car? That's what Christabelle Noronha set out to discover when she
met Mr Tata at Pune, as 2007, a momentous year for the Group, was drawing to a close.
There has always been some sort of unconscious urge to do something for the people of India and
transport has been an area of interest. As urbanization gathers pace, personal transport has become a
big issue, especially since mass transport is often not available or is of poor quality. Two-wheelers -
with the father driving, the elder child standing in front and the wife behind holding a baby - are very
much the norm in this country. In that form two-wheelers are a relatively unsafe mode of
transporting a family. The two-wheeler image is what got me thinking that we needed to create a
safer form of transport. My first doodle was to rebuild cars around the scooter, so that those using
them could be safer if it fell. Could there be a four-wheel vehicle made of scooter parts? I got in
touch with an industry association and suggested that we join forces and produce what, at that point,
I called an Asian car: large volumes, many nations involved, maybe with different countries
producing different sets of parts¦ nobody took the idea seriously, nobody responded.

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This was similar to what happened when we wanted to get going on the Indica. I had proposed a
partnership with an industry body to create an Indian car, designed, developed and produced in India,
something that could be conceptualized and executed as an Indian enterprise. Everybody scoffed at
the concept. I remember people saying, "Why doesn't Mr Tata produce a car that works before he
talks about an Indian car." My confidence got a boost when we finally succeeded with the Indica.
Willy-nilly, we decided to look at [the low-cost car] project within Tata Motors.

It was never meant to be a Rs1-lakh car; that happened by circumstance. I was interviewed by the
[British newspaper] Financial Times at the Geneva Motor Show and I talked about this future
product as a low-cost car. I was asked how much it would cost and I said about Rs1 lakh. The next
day the Financial Times had a headline to the effect that the Tatas are to produce a Rs100,000 car.
My immediate reaction was to issue a rebuttal, to clarify that that was not exactly what I had said.
Then I thought, I did say it would be around that figure, so why don't we just take that as a target.
When I came back our people were aghast, but we had our goal.

Today, on the eve of the unveiling of the car, we are close to the target in terms of costs. We are not
there as yet, but by the time we go into production we will be. This project has proven to everyone
that if you really set yourself to doing something, you actually can do it.

Two-three important events have influenced the development of the car; inflation, for one. The cost
statement was made three-four years back but we are holding on to that price barrier. This will
definitely diminish our margins. The price of steel, in particular, has gone up during the intervening
period.

A second point is that we initially conceived this as a low-end 'rural car,' probably without doors or
windows and with plastic curtains that rolled down, a four-wheel version of the auto-rickshaw, in a
manner of speaking. But as the development cycle progressed we realized that we could - and needed
to - do a whole lot better. And so we slowly gravitated towards a car like everyone expects a car to
be. The challenge increased exponentially; there was the low-price barrier, inflation, adding more
features and parts to the vehicle, substantial changes in basic raw materials€¦ What the team has been
able to achieve, in the face of all these constraints, is truly outstanding.

Why India Must Think Small to Stay Big

Ratan Tata looks positively relaxed as he walks into the lounge of Mumbai's private airport for this
meeting. He has been awake since 3am and has just flown in from the south. There are hardly any
signs of fatigue as he poses for pictures before the interview is scheduled to begin.

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As the coffee comes in, Tata sends word to remind his driver to have his meal as he is going to be
late. The first thing that strikes me about this man is his humility and disarming attitude. Remember,
he is India's most powerful corporate chieftain who is equally well known across the world.

The topic now shifts to the all important Rs 1 lakh car and the rationale of moving down the value
chain. Is this the best route and does it make sense to ignore the more profitable premium category?

If you look at India, you have about one billion people growing at about 17-18 million a year. You
have a middle class or a consuming class of about 250 million, which is increasing from the bottom
up each year. And you have a higher percentage at the top of the pyramid, which has been the buying
public hitherto for most Indian products.

There is also a segment of the market that is brand conscious, prestige-conscious and would often
even prefer to buy foreign brands to Indian brands. They know what is happening elsewhere in the
world and would prefer to put their money on a foreign brand rather than an Indian brand, he
explains.

In the automobile sector, other than Tata Motors and Mahindra & Mahindra, the industry here
largely comprises of foreign companies. As Tata says, while it is an issue of great satisfaction that
these two Indian companies have been able to get meaningful market shares. in this arena, only the
top part of the pyramid is being addressed.

Hence, the million-plus cars being sold are going mainly to that segment and somewhat to the top
end of this large consuming area. I had projected that we would be a million cars in 2000 but that did
not happen because we were in an economic downturn.

So we can say that in 2007, our market would be 1.7 million or two million units. But is that really
the market potential of the country? After all, it is one where the people buy six million two and
three wheelers, which is six times the passenger car market, he says.

As everyone is aware, this is obviously because of the price disparity. The point therefore, he adds, is
to be able to address the lower market somehow with a reasonable acceptable product. India, in any
case is a country where people have a tremendous urge to own but often it is beyond their reach.

Why do you see such a great sale of clothing on a foot path? Why is Fashion Street in Mumbai so
popular? The guy in the factory wears clothes that at least look like what the higher end wear. The
fact that they come from Tibet or Nepal is not an issue.

Why is it that the same footpath sources are able to sell tennis or running shoes even if they are
fraudulently branded Nike or Reebok? The person is aware of those brands, wants them but cannot
afford to pay for them. So, he settles for these, remarks Tata.

What is clear is that if branded product manufacturers can address that market, it is a huge
opportunity. The bigger question is the ability to address it and this where Tata believes it is possible.

If we are looking at a small car, we should not do this at the same proportion as cars of today are
being looked at. We should be bold and take some risks so that we can have a much larger scale of

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consumption of that product in India or elsewhere. We need to take a gamble on that and that is my
take on addressing that wider market, he says.

Tata believes that this is something that needs to be done because otherwise the Chinese will address
that market in India with a suitable product. All that they will do is to squeeze the Indian
manufacturers into a position at the higher end of the market, denying him access to the larger
market.

We can certainly increase numbers by addressing the lower end on lesser margins but still be
profitable. The Ace has been an example at the commercial vehicle end. It is the same thing where
you are getting much more for that vehicle.

You must not be overpricing the value for what you are providing. If you can answer that, then it
makes sense. Then if you take it further and put power steering, provide air conditioning and so on, it
becomes an attractive product that others cannot compete with, he says.

According to Tata, the Rs 1-lakh car would probably be out towards the end of 2007-08. The way it
is being planned now, it is going to be a rear engine car, essentially steel, with some plastic parts. It
will be a five seater with four doors. No decision has been taken as yet on the engine capacity.

The car will have a continuous variable transmission. At that low cost, it will not have a clutch and
will be easier to drive without any gears. It will be a product that will be simpler to deal with, easier
for women to drive and something that we hope will add value to the customer, he says.

Tata Motors will produce the bulk of the production in its plant. This is where the entire concept
becomes interesting. We What we also wish to do, which is still not fully clear and a concept at this
point of time, is to create any opportunity for entrepreneurs, he says.

Low cost units in different parts of the country will assemble the car where Tata Motors will take the
responsibility for training on site and other aspects related to quality etc.

We will give young entrepreneurs the opportunity to establish enterprises in distributed areas to
produce this for us. We will produce all the high volume parts and send them as kits to these
assembly units. This will also enable us to address some international markets in Indonesia, Africa
etc on the same kind of basis.

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Tata’s people’s car:

Tata’s one lakh car is the most expected car in recent times not only in india, the whole world is
anticipating for the car. “The one-lakh car is a case study which the whole world is watching. If
successful, the car can spark demand in a new segment all over the world” reports JD power an
automotive rating and research firm. That’s why every news and rumors about the low cost car is
getting covered in almost every magazines, every newspapers and every web portals even the mighty
Business week and BBC is reporting about the developments of the car. The most expected car has
also become the most controversial car in Indian history. Whether its the singur controversy or the
competitors criticism in one or many ways the one lakh car is making news.

While the Chevrolet Aveo, currently the cheapest car in the US, costs around $ 10,350 while
Europe’s low cost contender the Dacia Logan costs around 6000 euros. Coming to india while most
manufacturers are finding difficult even to make a 100cc bike for Rs40000 Tata is building a car for
1 lakh ($2500) and Tata has to break its own achievements and has to set new levels of benchmarks
in design, production, assembly, logistics and whereever they can to produce a car at such a price.

Can the Tata’s meet the expectations? Will the one lakh car convey the india’s potential to the
world? Will Tata stick to its price tag? Will it make sense for Tata to have a car when other players
are moving to premium segments? Will the more demanding customers will like the low cost
machine? In this preview we will find answer for all these questions also we will know how tata is
cutting the cost in all domains to adhere to its price tag.

Name for the Commuters car:

The most watched car in the Indian car space — the Rs 1-lakh ($2500) offering from the Tata Motors
stables — is still unnamed, but company sources here believe that `Jeh’ is emerging as the `most
favoured name’. “It has always been our Chairman Mr Ratan Tata’s dream to name one of the cars
after J.R.D. Tata,”said a Tata official.

What’s the 1 lakh car all about?

Tata says the proposed Rs 1-lakh car would be a vehicle that “will seat four to five people and have a
rear engine. It will not be a scooter, three-wheeler or an auto-rickshaw made into a car.” “It will also
not be a stripped down car. It will be an inexpensive car,” he said, but added that it would obviously
not have the finish or the high speed or the power of a larger car. It would be a rear engine, 4-5 seat,
four-door car with about 30 hp (horsepower) engine. Though it is tough to preview a car which is
guarded highly by its manufacturer, we will unveil as much we can in this post. The price we have
announced is the price we are launching the car at. Tata never said the price will never rise. But he
can’t say if it did, when. When the Maruti van was first launched I bought one of those for Rs
50,000.Of course now that product is not available at that price. Our Endeavour with the Nano will
be to hold our price as much as possible axAbout.com, All rights reserved.

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 MODELS OF TATA NANO
 Tata Nano Standard
 Tata Nano Diesel Standard
 Tata Nano Deluxe
 Tata Nano Diesel Luxury
 Tata Nano Luxury
 Tata Nano Diesel Deluxe

VEHICLE SUMMARY
Name: Nano
Model: Standard
Car Body Type: Hatchback
Segment: A Segment
Top Speed: 105
0 to 60: 12.60
0 to 100: 0.00
Fuel Consumption:
26.00 kmpl.
Highway
Fuel Consumption:
22.00 kmpl.
City
ENGINE SPECIFICATIONS
Displacement: 624cc, 3 cylinder, rear engine
Engine Type: Petrol
Maximum Power: 33bhp@5500rpm
Maximum Torque: 48Nm@2500rpm
DIMENSIONS
Length: 3090 mm
Width: 1485 mm
Height: 1570 mm
OTHER SPECIFICATIONS
Seating Capacity: 4
Tyre Size: R12
Suspension: McPherson strut & Independent coil spring
Steering: Power
Brakes: Front Disk, Rear Drum
Gears: 4 Manual
Ground Clearance: 180.00 mm
Kerb Weight: 580.00 kgs.
Fuel Tank: 30.00

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FIND VEHICLES

Performance Comfort Find More Like This
Better Fuel Efficiency With Remote Central Locking Similar Body Type
Better Top Speed With Electric Seat Adjustment More Cars From Same Segment
Safety With Power Windows
Vehicles with ABS With Power Steering Body Type and Looks
Rear Defogger With Climate Control Sedan
Engine Type With Alloys Hatchback
Petrol Engine Vehicles With Leather Seats Coupe
Diesel Engine Vehicles With Remote Boot and Remote Roadster
Fuel Filler Estate

Photos Photos Interior Photos
Tata Nano Luxury Tata Nano Basic Tata Nano

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Tata Motors to produce one lakh car in Thailand

Yesterday, there were media reports indicating Tata Motors would unveil a high-end variant of
people’s car or 1 lakh car (jeh) at the upcoming Geneva Motor show. It is very obvious that Tata
Motors would launch the one lakh car across the globe and will customise it depending on the market
demand. For South East Asian Nation, it’s almost sure that Tata Motors will produce the one lakh
car in Thailand plant. It recent years, Tata motors is very bullish on Thailand. Tata Motors is
building an assembly plant in alliance with Thonburi Automotive to sell the Sprint pickup in
Thailand from March 2008. Tata Motors has also submitted a request to Business of Foreign Trade
in Thailand to set up an assembly plant for eco cars with a capacity of 100,000 units at an investment
of over $250 million (1000 crores) in Thailand. Connecting the dots, we come to know that Tata
Motors will produce an environment friendly variant of one lakh car in Thailand. CNG and LPG is
likely to be the option. In addition, Tata will produce a much powerful (engine with a capacity of
1000cc) one lakh car in Thailand to cater to the needs of the region which are currently dominated by
Japanese majors like Honda and Toyota. Safety features like airbags and ABS will be added to the
one lakh car to comply the safety standards

Tata plans $250m eco-car plant in Thailand

Few weeks back we reported you on Global auto makers plan to make Thailand an eco-car hub under
the heading Is Thailand edging out India?

Tata Motors which will soon roll out the new generation sprint through its alliance with Thailand
based Thonburi. Tata Motors will produce 35,000 pickups from 2008 in Thailand. Now, it plans to
make 1lakh environment friendly cars in Thailand. Global Auto maker are making queue in Thailand
to avail the tax breaks offered by the Government of Thailand to companies that produce hybrid
vehicles. For more details read click the link specified above. Tata Motors has submitted an
application to build a new eco-car assembly and parts plant, with annual output capacity of 1,00,000
to Thailand’s Board of investment. Tata Motors will invest around $250 million (1000crores) for the
Thailand plant. Tata has already invested $43 million for the pick-up plant.

Ace pick-up:

Tata Motors may also produce a pick-up based on its small truck- Ace for the Thailand market. It
has already launched the passenger version of Ace, called Magic, in the domestic market. Tata’s
Magic could be re-engineered to a pickup and made available under different eco-friendly fuel forms
like compressed natural gas (CNG) and liquefied petroleum gas (LPG) to meet the emission norms.

Indian Manufacturers in foreign soils

When many of us prefer Honda’s and Suzuki’s over Tata and Bajaj, we fail to notice Indian
manufacturers are making great strides in many parts of the world. Tata, Mahindra & Mahindra,
Bajaj and TVS begin to attract customers across the world not just in under-developed countries but
also in developing countries and developed countries. Unlike Chinese manufacturers, an Indian
manufacturer does not make any copycats and they are not facing any litigation. Apart from the
trucks where it’s a world leader, Tata’s passenger car division is making its own mark in world
automobile market. Tata sold its indica in Europe till 2005, it sells indica’s, indigo’s, TL sprint,

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sumo’s and safari’s in most parts of Africa and south America. Tata plans to make a comeback in
Europe and it is building a assembly plant in Thailand. Tata motors also plans to debut in Russia.
Mahindra has joint ventures to sell its vehicles in South Africa and Europe, and a local distributor in
Malaysia. It has manufacturing facilities in Uruguay, and will soon set up plants in Egypt and Russia.
Soon it plans to enter the toughest American market. Bajaj Auto which already has a significant
presence in Colombia and most of the Asian and African countries such as Srilanka,malayasia,
bangladesh,guatemala, Indonesia and south Africa is planning to roll out pulsars in iran. Bajaj auto is
one of the largest exporters of three wheelers. You can find Bajaj’s three wheeler even in Europe and
Unites States of America. Bajaj Auto has said in the past that it would like exports to touch the
10lakh mark by 2010 and be a significant part of the overall revenue. Today, exports are close to
percent (Rs1700crores) of the company’s total revenue. TVS motors have built a plant in Indonesia
and has already rolled out a step-thru in that market. TVS plans to use the Indonesia plant as its
manufacturing hub for exports to Malaysia, Vietnam, Thailand, Myanmar and Cambodia. Ok let’s
stop the excitation! will Tata and Mahindra be the next Toyota or Honda, are Indian manufacturers
are really making waves in western markets or is it just media hype? do they have potential to match
the mighty Ford’s, Honda’s and Yamaha’s. Hereafter, we will try to cover all the movements of
Indian manufacturers in foreign soil!

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FEATURES

Overview

Tata Motors is the world's fifth largest medium and heavy truck manufacturer and the second largest
heavy bus manufacturer. Mr. Tata's 'dream project', the Rs one-lakh car has generated immense
interest in the Indian auto market, where Tata's current lowest-priced car is Indica with a tag of Rs
3.3 lakh. The one lakh rupee car is going to be a real car with the basic features.

Nano is in every way a car, with an engine, a suspension, and a steering system designed for its size.
The most watched car in the Indian car space - the Rs 1-lakh offering from the Tata Motors stables -
is going to be launched in March in 3 variants. When launched, the car will be available in both
standard and deluxe/luxury versions.

All versions will offer a wide range of body colours, and other accessories so that the car can be
customised to an individual’s preferences. It is aimed to rank between high end motor cycles and the
compact car segment. Instead of researching on low cost components by themselves, Tata has
delegated the task to various vendors.

The fuel-injection system is being developed by MICO while Brakes India and Bosch Chassis
Systems will be supplying low cost braking system. Around 55 prototypes have been tested on
Indian roads under varied conditions.

The name 'Nano' was chosen as it denotes high technology and small size. It was the most eagerly
waited car. State Bank of India (SBI) has been appointed exclusive booking agent for the Tata Nano.

People world over were keen to see what Tata Motors' People's Car looked like, and know more
about it. The Tata Motors website saw nearly 7.9 million hits on January 10 (the day the Nano was
unveiled), while the Tata Nano website saw 4 million hits in 30 hours, making these sites among the
busiest in the world.

Engine

Nano has a rear-wheel drive, all-aluminum, two-cylinder, 623 cc, 33 PS, multi point fuel injection
petrol engine. This is the first time that a two-cylinder gasoline

The lean design strategy has helped minimize weight, which helps maximize performance per unit of
energy consumed and delivers high fuel efficiency. Performance is controlled by a specially designed
electronic engine management system.

Fuel Efficiency

As in international markets, Nano will have back mounted engine, pushing the luggage space to the
front. Making the engine closer to the fuel tank has another advantage of increased fuel efficiency.

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Rear mounted engine also help in reducing the power loss during transmission. Nano has front disk
and rear drum brakes. The company claims mileage of 22 kmpl in city and 26 kmpl on highway.

Safety & Comfort

By adhering to the fact that less weight requires less power, Nano is made of light weighing steel.
This has made the Tatas come up with a cheap alternative with out compromising on safety and
performance.

With an all sheet-metal body, it has a strong passenger compartment, with safety features such as
crumple zones, intrusion-resistant doors, seat belts, strong seats and anchorages, and the rear tailgate
glass bonded to the body.

Tubeless tyres further enhance safety. It exceeds current regulatory requirements with a strong
passenger compartment, crumple zones, intrusion resistant doors, seat belts, strong seats and
anchorage.

Length 3.1 meters
Width 1.5 meters
Height 1.6 meters
All-aluminum, Rear Mounted,
Engine Rear Wheel Drive
Capacity 623 cc
Power 33 PS
Fuel Injection Multi Point Fuel Injection (MPFI)
Fuel Type Petrol, Diesel Version will be later
Body Type Sheet Metal
Seating Capacity 04 (Four)
20-22 Kmpl (City drive)
Mileage 26 Kmpl (Highways)
Top Speed 75 K.M
Euro-IV, Bharat Stage-III
Emission Norms compliant
Safety Norms Frontal Crash Tested
Versions One Standard and Two Deluxe

Engine and Transmission:

It is almost sure that Tata’s no frills car will be an rear engine car –to save the transmission cost. Tata
Motors have tested an 550-650cc engine but felt it is not sufficient to propel a four seated and they
decided to step up the engine. Robert Bosch the international Auto Electronics major has
acknowledged that’ its latest success is an order to supply alternators, brakes, and gasoline and diesel
management systems for the one lakh car from Tata’. So a diesel and petrol unit is sure for the one
lakh car. It is believed that finally tata settled for a 660cc petrol unit and 700cc diesel unit to power
the one lakh car.

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For the 660cc petrol unit Bosch has designed a special fuel injection system called “value moronic” -
the cost of the system is roughly half of a full scale system and it is said to be more efficient. For the
700cc diesel will be a CRDi unit (it’s DICOR for Tata) too Bosch has developed a special injection
system for this world’s first twin cylinder CRDi engine. Earlier in 1998 when Ratan Tata unveiled a
concept car named ‘zing’ he initiated the idea of producing the 1 lakh car using scooter parts. Yes,
Tata opted a basic, automatic or variomatic transmission, instead of a manual transmission set up.
Not only it will help the tata in cutting the cost as Tata targets millions of two-wheeler users for its 1
lakh car it will be easy for the tata to lure them. In the combination of smart petrol unit or a DICOR
unit with automatic transmission the one lakh car will be dearer not only while you’re buying it but
also it will be softer on your monthly fuel bill. Overdrive reported petrol version of the one lakh car
registered mileage/ fuel efficiency in the region of 26kpl (65mpg) in the internal Tata tests and but
Tata is gunning for 30kpl!(70mpg) enough isn’t it? If not, Tata – Bosch DICOR unit may satisfy our
thirst. On the performance side the petrol unit is believed to produce 33bhp with a top speed of
120kph(80mph)

Few disadvantages in a rear engine car:

* Uneven weight distribution and hence poor traction control

* Poor cornering and poor handling

* Poor engine cooling and hence more chance for engine overheating

* Almost no boot space and cramped space for rear passengers

Design and features:

Nano is designed with a family in mind, has a roomy passenger compartment with generous leg
space and head room. It can comfortably seat four persons. Four doors with high seating position
make ingress and egress easy.

Yet with a length of 3.1 meters, width of 1.5 meters and height of 1.6 meters, with adequate ground
clearance, it can effortlessly manoeuvre on busy roads in cities as well as in rural areas. Its mono-
volume design, with wheels at the corners and the power train at the rear, enables it to uniquely
combine both space and maneuverability, which will set a new benchmark among small cars.

Tata’s zing and indiva concept cars exhibited at 1998 and 2002 auto expo would be base for the
proposed one lakh car. Apart from the concept cars, the one lakh car is sure to have few signs
popular rear engined cars such as Volkswagen beetle, Fiat model 500 and Porsche cars. Tata has
outsourced the design to Italy’s Institute of Development in Automotive Engineering (IDEA) which
designed most Tata;s cars including indica. The one lakh car probably will not be designed to win
any beauty contests but at the same time it will not be a ugly duckling either. As evident from the
indiva, tata’s small car will embrace not so contemporary tall boy look similar to Maruti Suzuki’s
WagonR. Under the front hood the one lakh car will have a small storage space, “like an overhead
bin” on an airplane.

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As bonnet is used for the storage space, headlamps will not be a wraparound, it may be quadrilateral
in shape and the headlamps will sit on the smaller bonnet. As the one lakh car is a rear engine one, i
believe drivers will have more fun with this car, starting from steep rake to the larger front
windshield is truly what every driver loves to have. For the one lakh car there will not be a
distinctive grille but because of the round bumper, Tata’s will carry its familiar ’smiley’ front look to
the one lakh car as well. Tata’s small car will make use of a single wiper instead of two, not only for
giving the car a cleaner look also for cutting the cost of windshield wipers for the people’s Car in
half. In the sides as Tata will source smaller tyros from its cargo carrier ace for the one lakh car and
because of this Tata will not spruce up the fenders. Not so full wheels and black door handles will
feature in people’s car. Identical rear view mirrors will be used on either side to save cost. In the rear
one lakh car will be more up market since the car will have pillar mounted tail lamps similar to its
sibling indica.

Inside, the one lakh car will feature all the basic amenities, instrument console would have a
speedometer, an odometer and fuel gauge. You have to cut costs on everything—seats, materials,
components—the whole package,” says Tata Group Chairman Ratan N. Tata. These are the words
which are going to be reflected in upholsteries and door trims.

Some Innovation made the Tata Nano possible, from design to product finalization

Initially I had conceived a car made by engineering plastics and new materials, and using new
technology like aerospace adhesives instead of welding. However, plastics didn't lend themselves to
the volumes we wanted because of the curing time required. Volumes mean the world in this context:
if we produce this car and if it is for the wider base of the pyramid, we can't settle for small numbers
because then the purpose is defeated.

When we were planning facilities for the car and working out a business plan, the business plan
shown to me was looking at a figure of 200,000. I said 200,000 cars is crazy. If we can do this we
should be looking at a million cars a year, and if we can't do a million then we shouldn't be doing this
kind of car at all.

But such a figure (a million cars) has never been achieved in the country before. If it had to be done
the conventional way, it would have meant investing many billions of dollars. So we looked at a new
kind of distributed manufacturing, creating a low-cost, low break-even point manufacturing unit that
we design and give to entrepreneurs who might like to establish a manufacturing facility. We looked
at different ways of servicing the product, at the customer's location, and through a concept adopted
from the insurance industry, wherein self-employed people are trained and certified by us. And we
went back to innovation in design and scrupulously took, as much as we could, cost out of the
product.

We did things like make similar handles and mechanisms for the left- and right-side doors; we
developed our own small engine which could sit under the rear seat, enabling us to craft a smaller
overall package; we looked at a new type of seats; and we worked at cutting costs everywhere. We
have put our instrument cluster in the middle, not in front of the driver. This means the same
dashboard will work for a left-hand-drive vehicle. There are a lot of such innovations that are low-
cost and future-oriented.

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Equally important to the cost structure was the incentive we could get from having our
manufacturing facility at a particular place. The benefits on this count will be passed on to the
customer.

Our move to West Bengal was a leap of faith and a sign of our confidence in the leadership in the
state. We were breaking new ground, not only on the product front but also in helping industrialize a
previously ignored part of India. But we did not start out getting the incentives that other states were
offering. I remember telling the chief minister [Buddhadeb Bhattacharjee], "Sir, much as we have
tried, it makes no sense for us to come to West Bengal. We cannot meet the cost requirements we
have without incentives." It was then that we negotiated a set of incentives that, long-term, work out
to be the same as we may have had if we set up in some other place.

Other than emission norms and safety standards, what are some of the other challenges, physical and
psychological, that Tata Motors had to overcome to make this car happen?
There was the usual dilemma of what is basic and what is nice to have. A basic car may not have all
the niceties its fancier cousins sport, and when you're looking at saving money on every single bit of
the car â€” even parts that cost as little as Rs20 â€” you keep facing these dilemmas. Hundreds of
such dilemmas have risen.

However, we were always conscious that there should be no quality stigma attached to the buying of
this product. One thing we were clear about: this was never going to be a half-car. Nobody wants a
car that is less than everybody else's car. Our car may have a small engine and certain limitations in
terms of being basic, but that does not make it inferior. Also, we have a higher version of the car -
with air conditioning, leather seats, etc - that we will be displaying at the auto show in Delhi. We
hope people will look at that, too. Down the line, as we widen our range, we will have dressed-up
versions with higher-powered engines, diesel engines, automatics and the like. We have a whole
bunch of innovations coming along on this platform. What we now have is a car that is truly low-cost
which has, approximately, the same performance as a Maruti 800 in terms of acceleration, top speed,
etc.

Some myths about the one lakh car:

Though too early to call some news about the 1 lakh car as myth, from Tata words we can atleast
flush some rumors about it. Some scoops on car’s features includes - Curtains replacing glass
windows, removable bolt-on seats instead of the regular ones, roof will be an optional add-on, and
plastic body panels instead of the regular metal panels. Yes, Tata had talks with General Electric for
using its re-engineered plastics for its low cost car and Tata may make use of modern adhesives
instead of welding to cut down cost, but still there is no definite direction in this issue but certainly
there will be no curtains. The one lakh car will be a complete car with definite roof and glass
windows

15


Reactions about Nano

"It's a good historic moment for the Indian auto industry and also a proud one indeed that an Indian
company took a step forward on this road. Its an up gradation for an auto wheeler rider to by a car
now.“
Rajesh Jejurikar, Managing Director, Mahindra and Renault's.

"It's good product but it's still too early to say whether it will overtake the 800 because it caters to a
totally new market segment.”
Said Jagdish Khattar, Former MD of Maruti Udyog Limited

"Meeting the proper quality standards and safety is not feasible at all in such a model.
Andreas Prinz, Managing Director (Passenger Cars), Volkswagen Group Sales India.

"I think it is a great thing for India because mobility is giving new opportunities. I hope Tata drives
to great success with the Rs one lakh car, but it is not included in our plan.“
Thomas Kuehl, Board Member, Skoda Auto India.

16


TARGET MARKET

• The low-cost car is clearly intended for the masses. For the family of four that would
otherwise ride on a scooter, precariously balancing a tiny tot on the front and a baby on the
wife’s lap. For the first-time car buyer in India - a huge market despite the increasing number
of cars in the urban and semi-urban areas.
• Its Also attract the small cars buyers like maruti 800.

What makes Tata Nano so cheap !

• The Tata Nano uses plastics and adhesives rather than welding.
• introducing the car with an artificially low price through govt-subsidies and tax-breaks, or
• using vertical-integration, or
• Partially using inexpensive polymers or biodegradable plastics instead of a full metal-body.
• It has no AC, no power steering, no power windows, no power bells and whistles

Think Big With The Small Car: Ratan Tata

Ever since the Nano debuted last week, Tata Motors chairman Ratan Tata has faced all manner of
questions. From environmental (congestion/ pollution/emission) issues to the problems at the
company's under construction plant in Singur, West Bengal. Normally reticent, he has painstakingly
answered all of them. Here are some excerpts from some of the non-spec specific questions that he
had to field at the Auto Expo.

The Nano project was delayed because of the political agitation and later other issues. Will Tata
Motors be able to wrap things up as per schedule? And will the car itself undergo any more
evolution?

There is always last minute engineering that gets done. The main issue is that we have built the plant.
It was flooded earlier last year but thankfully before the machines and equipment were installed. The
water receded and construction is now on in full swing both from our side as well as the vendors.

17


The problem in Singur was not of our making, It was unfortunate. I hope we can improve the quality
of life in the highly district as a good corporate citizen should. We have already started to do that and
I hope the plant will attract more industries and create more job opportunities for the local populace.

A small car is a SMALL car. If one is looking for a limousine this is not the car to buy. If one is
looking for a three-box sedan, this is not the car to buy.
Ratan Tata has not made a claim to be the most eco-friendly in the world. They are in compliance
with emission norms in India and this current engine meets BS3 and is capable to being scaled up to
Euro 4 as well. There is a cost attached to being a totally green car. At the end of the day, all the
things you ask for may not be there in this vehicle because we had a cost target. And that would
include some of the green stuff as well.
They are a socially responsible company but they are not a philanthropic trust. They will make
profits. As for margins there would be several up trim versions and we will have our margins spread
over those versions.

There has been widespread apprehension that this car would create congestion because of its sheer
numbers...

All the question of congestion implies that we will seek the global market with millions of these
vehicles. They don’t have the resources to do that. But we are country of a billion people. Most
Indians are denied connectivity and this is a way.

India desperately needs a mass transport system and better infrastructure. But those are issues that
they don’t deal with. They would be concerned if vehicle created absolute chaos all over India. If
you faced chaos today it did not include these vehicles...so clearly there are other issues involved.

This car is not a targeted at a particular segment of consumers. But having said that they hope it will
change the manner in which one travels in semi urban and rural India.

Everybody has a desire of stepping aside, of wanting to do what one always wanted to do, to change
gears. I have some responsibilities which I have to fulfill before I do that.

They don’t think anyone should have sleepless nights. This was achieved by a bunch of young
engineers. And if we could do it, it can be done by anyone, probably better. The largest element of
cost in a car is material cost. India is not the cheapest on that count due to the tariff structure. But
labor is inexpensive and productive. And engineering inputs are very viable.

Everybody seems to imply that if you are at the low end of the market, how you can look at high-end
cars. But no one asks Unilever for instance how they can make and sell cheap soaps in India or
Africa and also expensive cosmetics elsewhere in the developed world.

18


FUNDAMENTAL ANALYSIS

• Overview of Indian Economy
• Industrial Profile
• Profile of Indian Automobile Industry
• Tata Motors

(1) Overview of Indian Economy

• The Indian economy continued to register impressive GDP growth, although the rate of growth
declined marginally over the previous year, reflecting inflationary trends driven by the increase
in the cost of energy and raw materials. The level of industrial activity has also begun to decline
as a result of fiscal constraints imposed on money supply and the raising of interest rates .
• Investment flows into India increased by 20% to a record level of about Rs. 120,000 Crores.
• The Indian automotive sector grew by 10% overall during the year with substantial growth in the
Light Commercial Vehicles sector and new passenger car introductions. In the country 499,978
new commercial vehicles were sold during the year and passenger car sales grew to 1.53 million
vehicles this year.

(2)Industrial Profile

Table 7.1 annual growth rate of Industrial Production in major sectors of Industry.
( Based on the index of Industrial Production
Base: 1993-1994=100
(Per Cent)
Period Manufacturing Manufacturing Electricity Overall
& Quarrying
Weights 10.47 79.36 10.17 100.0
1995-96 9.7 14.3 8.1 13.00
1996-97 -1.9 7.3 4.0 6.1
1997-98 6.9 6.7 6.6 4.7
1998-99 -0.8 4.4 6.5 4.1
1999-00 1.0 7.1 7.3 6.7
2000-01 2.8 5.3 4.0 5.0
2001-02 1.2 2.9 3.1 2.7
2002-03 5.8 6.0 3.2 5.7
2003-04 5.2 7.4 5.1 7.0
2004-05 4.4 9.2 5.2 8.4
2005-06 1.0 9.1 5.2 8.2
2006-07 3.8 11.5 7.3 10.6
# (April - November)
Source: Central situational Organization.

19


(3)Automobile Industry

 The liberalization policy and various tax reliefs by the Govt. of India in recent years has
made remarkable impacts on Indian Automobile Industry. Indian auto industry, which is
currently growing at the pace of around 18 % per annum, has become a hot destination for
global auto players like Volvo, General Motors and Ford.
 In India there are 100 people per vehicle, while this figure is 82 in China. It is expected that
Indian automobile industry will achieve mass motorization status by 2014.
 The passenger vehicle industry also witnessed a slowdown but managed to grow by 11.1% by
increasing discounts on mature products, launching new models and due to reduction in
excise duty announced by the government in Budget during February’08.
 Vehicle exports also grew, albeit at a slightly lower rate of 11.9% as compared to 14.8%
witnessed in the previous year
 The domestic commercial vehicle industry grew by 6.9% as compared to over 33% growth
achieved in the last fiscal

Table 7.2 : Automobile Production
(Numbers in 000)
Category 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
till sep`06
Passenger car 513 564 609 842 961 1,046 594
Multi-utility Vehicles 128 106 112 146 249 263 144
Commercial Vehicles 157 163 204 275 350 391 237
Two Wheelers 3,759 4,271 5,076 5,625 6,527 7,600 4,155
Three Wheelers 203 213 277 341 374 434 264
Total 4,759 5,316 6,280 7,229 8,461 9,735 5,394
Growth in percent - 2.00 11.70 18.60 15.12 16.80 14.97 18.04
Source: Ministry of heavy industries & Public Enterprise (Department of Hheavy Industry)

Automobile Company.
Alfa Citroen Hummer Lamborghini Maserati Porsche Tara
Romeo
Aston Ferrari Hyundai Lexus Mercedes Premier Tata
Martin
Audi Fiat ICML Lorinser Mercedes Proton Toyota
AMG
Bajaj Force Motors Infiniti Lotus Mini Rolls Royce Volkswagen
Bentley Ford Isuzu Mahindra Mitsubishi SAN Motors Volvo
BMW GM-Wuling Jeep Mahindra Nissan Skoda
Renault
Cadillac Hindustan Maybach Maini Auto Oreva Smart
Motors
Chevrolet Honda Land Rover Maruti Peugeot Spyker

20


 Automobile Export

Table 7.3: Automobile Export
category 2000-01 2001-02 2002-03 2003-04 2004-05 20005-0 2006-07
6
Passenger 23 50 71 126 161 170 98
car
Multi-utility 4 3 1 3 6 5 3
Vehicles
Commercial 14 12 12 17 30 41 23
Vehicles
Two 111 104 180 265 367 513 323
Wheelers
Three 16 15 43 68 67 77 62
Wheelers
Total 168 185 307 479 620 806 519

Growth in 20.24 9.74 65.35 55.98 31.25 28.03 27.43
percent

About Small car industries and Tata Motors

An ancient time after inventing wheel of potter, It took about 750 years to make wheels of cart. One
unknown inventor used the wheel of potter to make wheel of cart, this invention initiated the new era
of Transportation of goods and men. Then new era has been starting by making usage of two wheeler
and four- wheeler vehicles by the human being.

Exactly 100 years ago, in the year 1907, Henry Ford introduced Car in America (U.S.A.) which
triggered “Automobile or (Transportation) Revolution” . In India, exactly 50 years ago in the year
1957 first Domestic Ambassador car was introduced by Hindustan Motors.

After that, in our country there are number of companies who make two-wheeler, three-wheeler and
four-wheeler vehicles. There are number of company who makes small cars such as Hundai, Tata
Motors, Maruti Udhyog, General motors, etc. are putting up massive capacities that will make India
the small car hub of the world. India is the world’s largest country of producing small cars. In India,
in the year 1983 “Maruti-800” is the first domestic small car introduced in the market.

The Cheapest Cars of the World

Serial No. Model Name of Company Price (US$) Country
01 Nano Tata Motors 2500 India
02 QQ-3 Cherry Automobile 5000 China
03 Maruti-800 Suzuki Maruti 5200 India
04 Merry-Star Zeeli Automobile 5500 China
05 S-R-V Zeeli (Mini S.U.V.) 5780 China

21


The market share of small ca is increasing day by day. In the year 2004-2005 the share of small car
was 57.71% and 10,61,572 small cars were sold, and in the year 2007-2008 it was 60.63% and
17,50,000 small cars were sold. Now it is expected that Small car market will grow at 12 to 15% this
year and sales volume of over 1.5 million small cars.

Small car Market Share of different manufacturing company

Manufacturer Location Capacity Investment Completion Time
(Units/P.A) (In Crore)
Maruti Suzuki Gorgoan (Haryana) 300000 9000 In 2010
Hyundai Irungattukottai 300000 4000 February 2009
(Chennai)
Tata-Fiat Ranjangaon (Pune) 100000 4000 Late 2008
Tata Motors Singur (West Bengal) 350000 1500 Late 2008
General Talegaon (Pune) 140000 1200 Mid-2008
Motors
Honda city Bhiwadi (Rajasthan) 60000 1000 Mid-2009

The main objective of many of these manufacturing industries is to expand India’s car exports from
around 2, 20,000 units per year.

In recent time Tata Motors launched “NANO” (People’s car) on 10th January,2008 Thursday at the
ninth Autoexpo at Delhi. The launching of “Tata-Nano” car by Mr.Ratan Tata is a defining moment
in the history of India’s Automobile Industry and this event was attended by about 400 media
personnel and was on air by various television channels.

The Journey of Tata Motors from Train to Truck, from Truck to Nano Car.

• 1945 : TELCO (Tata Engineering and Locomative Company starts work after completion
• of second world war.
• 1954 : TELCO starts to make Trucks in Joint Venture with German Company Daimler
Benz.
• 1994 : It starts to make Mercedes Benz in Joint Venture, first time in India,
• 2002 : Partnerships with Daimler Benz came to an end.
• 2002 : The Name of TELCO Company change and known as “Tata Motors”
• 2003 : Ratan Tata declared to make worlds Cheapest car for Rs.1 lac.
• 2004 : Tata Motor take over “DEVU” Company of South Korea and got listed in
NewyorkStock Exchange
• 2005 : Tata Motors purchased 21% share holding of Spanish Bus.
• 2008 : Tata Motors launch 100000.00 Rupees the Cheapest Car of the world.

22


Tata group is one of the oldest and the most reputed group of companies in India. The founder of this
group was Sir Jamshedji Tata. Earlier “Tata Motors” known as “TELCO” (Tata Engineering and
Locomative Company). It commenced work in the year 1945 after completion of Second World War.
Initially company was manufacturing truck and then in the year 1994 TELCO Co. started the
production of Mercedes-Benz, Joint Venture with “Demler Benz Co.” of Germany. In the year 2002
the name of TELCO Co. changed to “Tata Motors”

Tata Group comprises 98 operating companies in 7 business sectors as Information Systems,
Communication, Engineering, Materials, Services, Energy, Consumer Products and Chemicals. Tata
Companies provide employment to about 2,89,500 people and have share holder’s base of over 2.9
million and market capitalization of 66.9 billion as on February 21,2008.

Tata motor is a second largest company in the world in making passenger vehicle and heavy bus
Manufacturing with revenue of US$ 7.2 billion in the year 2006-’07.

In the year,2003 Mr. Ratan Tata the Chief of Tata Group declared that he will make the worlds
cheapest Car with dealer Price of Rs.1,00,000/- At that time many member of different Automobile
companies passed comment for Mr.Ratan Tata and their Mission. One member of Osamu Suzuki
said that-“this is impossible mission” and statement made by him that - “Tata will not be able to
make a Rupees 1, 00,000/- Car. But, Mr.Ratan Tata gave perfect answer to the critics, who said it is
not feasible to manufacture a car in Indian Rupees One lakh.

There is one message given by our Prime Minister, Mr.Manmohan Singh.He said that “If our time
and energy are consumed for worthless thoughts then how effectiveness can comes in our task?” In
same way Mr.Ratan tata fulfilled their dream by giving an opportunity to the middle class people that
to have own car. He said that “Ever since we started work on the car, we have been hearing various
negative statements” at that time he put their full concentration behind making 1,00,000 Rs. Car and
at that time if they waste their time and energy behind thinking of these all negative statements then
today, Tata-Nano Car will not be among us.

The motivation of Mr.Ratan Tata to make one lakh Rs. Car is due to one Observation he made and
which motivated him to make the cheapest car with Dealer price of Rs. 1,00,000/- . We will know
about that observation in his own words, He said that “I observed family riding on two-wheeler the
father driving the Scooter, his young kid standing in front of him, his wife seated behind him holding
a little baby and, I decided to do something about it and it led to me to provide affordable, a safe, all
weather from a transport for such a family.” This was disclosed by him after displaying their dream
project at ninth Autoexpo, at Delhi.

Mr.Ratan Tata give dream to the middle class people as well as youth who are from middle class by
making car whose price will be affordable and attractive.

 Tata Motors Limited, formerly known as TELCO (TATA Engineering and Locomotive
Company), is a multinational corporation headquartered in Mumbai, India. It is India's largest
passenger automobile and commercial vehicle manufacturing company. Part of the Tata
Group, and one of the world's largest manufacturers of commercial vehicles. The OICA
ranked it as the world's 20th largest automaker, based on figures for 2006.
 Tata Motors has its manufacturing base in Jamshedpur, Pantnagar, Lucknow, Pune.

23


 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

 Companies Performance

Total Industry. Sales (Nos.) Total Com. Sales (Nos.) Mkt. Share (%)
Category 2007-08 2006-07 Growth 2007-08 2006-07 Growth 2007-08 2006-07
Commercial 5,58,977 5,17,327 8.1% 3,52,785 3,34,238 5.5% 63.2% 64.7%
Vehicles
Passenger 17,50,347 15,75,235 11.1% 2,32,864 2,46,042 -5.4% 13.3% 15.6%
Vehicles
Total 23,09,324 20,92,562 10.4% 5,85,649 5,80,280 0.9% 25.4% 27.8%

Domestic Industry. Sales (Nos.) TCom. Sales (Nos.) Mkt. Share (%)
Category 2007-08 2006-07 Growth 2007-08 2006-07 Growth 2007-8 2006-07
M&HCV 2,70,994 2,75,556 -1.7% 1,65,619 1,72,842 -4.2% 61.3% 62.9%
LCV 2,28,984 1,92,234 19.1% 1,47,316 1,25,744 17.2% 64.3% 62.9%
Total CV 4,99,778 4,67,790 6.9% 3,12,935 2,98,586 4.8& 62.7& 64.0%

 News from various surveys and research worldwide
 Small cars have big potential: Survey Business Standard: January 15, 2008
 Tata Nano sets the platform for India as a frugal engineering hub livemint.com: January 11,
2008
 Global problems, Desi solutions The Economic Times: May 15, 2008
 Nano makes it to Time's most important cars of all time The Hindu Business Line: January
17, 2008
 Indian auto industry to lead globally by 2020: IBM New Delhi: The Indian automobile
industry is all set to be the global leader by 2020 with the trailblazing work done by the
Tatas, according to IT and consultancy giant IBM. September 08, 2008
(sources : Indian Brand Equity foundation www.ibef.org)
 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.

24


OBSTACLES TO NANO

Controversies Involved

Controversies also arose about Tata's planned manufacturing unit for the car in Singur, West
Bengal, where the state government of West Bengal has allocated 997 acres (4.03 km²) to Tata
Motors. The construction of the car factory on that tract of land will require fertile agricultural land
and the expropriation and eviction of ca. 15,000 peasants and agricultural workers.

The affected farmers fear they will receive inadequate or no compensation and therefore lose their
livelihoods. Activists near Kolkata, where Tata's manufacturing unit is located, started burning the
car in effigy.

In New Delhi, a group of six women protested wearing T-shirts bearing slogans that said, "The Rs 1
lakh car has Singur people's blood on it." The Trinamool Congress alleged that Tata motors usurped
the agrarian land for the construction site and have threatened to stall the manufacture of the car. The
11 cases were dismissed.

The Nano is alleged to have severely affected the used car market in India, as many Indians opt to
wait for the Nano's release rather than buying used cars, such as the Maruti 800 (a rebadged Suzuki
Alto), which is considered as the Nano's nearest competitor. Sales of new Maruti 800s have dropped
by 20%, and used ones by 30% following the

 However, Due to the Singur land dispute, the "Stalled Car Factory" is "Costing Jobs, Splitting
Neighbors in West Bengal”
 “ Tata's problems in West Bengal are scaring off other industries hoping to locate here,
including Infosys, a software maker that wanted to build a business park that would provide
5,000 jobs.
 Due to ongoing opposition to Tata's Singur car-factory by Mamta Banerjee, who demanded
land to be returned from the factory, Tata Motors took decision to pull out of Singur. Tata
Motors is manufacturing Tata Nano at its Pantnagar plant.
 Tata Motors announced it was pulling out its Nano small car industrial project from West
Bengal's Singur and blamed the Mamata Banerjee-led Trinamool Congress, which
spearheaded the protests against the factory, for the 'painful' decision.
 While existence of Tata Nano could lead to high industrial growth , the exit lead west Bengal
a loss of more than 80,000 crore .How ever Tata has to suffer in terms of delay and settlement
cost

.
The decision to relocate the Nano to Gujarat marks the end of a traumatic experience for the house of
Tatas. It was the rapid decision making of the Gujarat government which carried the day for the
Narendra Modi government, with the state government ready to hand over land within a matter of
days.
In an interview shortly before rushing off to meet the CM, Mr. Tata looked back on the Singur
experience and spoke about the new scenario facing the Nano. Intriguingly he left some hope for
Singur saying that Tata Motors could revisit Singur if the atmosphere was conducive

25


Last night. Ravi (Tata Motors MD Ravi Kant) has been going around reviewing various sites. The
final decision was taken last night. In fact, we have been receiving letters from various state
governments ever since we faced problems (at Singur). Land was the main issue. It was a kind of
insurance (at the time). But there was a tremendous urgency once we made the statement on 22
August that we would move if things didn't improve as we had already lost a lot of time. We started
to respond sometime in September to the offer from the states. We started running around looking at
the land. The same people had to look at the land on offer (to make a proper comparison). The
Gujarat chief minister moved really fast, and yesterday, we took the decision. In other states there
were processes to be gone through or things which the legislative assembly had to do which may or
may not happen despite the best intention of the chief minister of the state. Gujarat enjoys the
reputation of being an investment-friendly state. So we decided late on Monday evening that we may
as well go with Gujarat as everything was in place

Well, when I said that, this project was not on our minds. We were already in Gujarat through Tata
Chemicals. And as luck would have it, we are here again.
Gujarat was able to define the land, secure possession of the land, the main thing, at an unbelievably
fast pace. In fact, if we could move a plant in a day, we could have actually have started operating
here, given the fact that everything was ready in the state.

Gujarat doesn't believe in concessions. How did Gujarat's offer compare with that of West Bengal?
Well, it is almost similar. Whatever we were offered in Singur, everything is being matched here.
The elements (incentives) may not be identical, but in totality, the package is the same.

You plan to launch the Nano this winter from Pantnagar and Pune which have a capacity of one
lakh? How will you tackle a situation if the demand (for Nano) explodes?
It would be a makeshift kind of operation. Unlike a steel plant where capacities are fixed, in car
manufacturing you can outsource, you can redefine assembly lines. We need to represent to the
world that despite all this, we brought the car within the set timelines.

What impact would this relocation have on the company books?

All equipment from Singur will be moved. So, there is no loss there. We can retrieve and utilize a
fair amount of the fixed assets. There is no appreciable loss that will reflect on our finances this year.
It is not that the investment of Rs1, 500 crore is lost. As for Singur we already have the land allotted
to us. The state government wants us to look at other projects and we will look at other projects. It is
not that there will be a crater there. We will do something in Singur in future if the state government
wants us to do something. We will do something, if the environment is conducive.
I don't know how much was the farmers' problem (and how much was political). Political opposition
should be subordinated to the better welfare of the country. Who is the loser? Are the people really
going to prosper, many of whom are below subsistence level? I am sure, (despite this), West Bengal
will attract more investments. What about the people who had aspirations for jobs? These are the
questions that come to my mind. Political opposition must hold the (interests) of the country first and
then the state. I think, it is impacting everything. It is percolating like a coffee machine. We are
facing a downturn because of the tightness of credit. The US and Europe are still reeling because of
the write-offs and it is having a Domino's effect in other industries. So nobody seems to know where
it will bottom out.

26


COMPETENCIES OF TATA NANO

• Tata is now 57th most valuable brand globally livemint.com: April 22, 2008 The Tata
group’s intense activities in 2007 have seen it rising 45 places to No. 57 in Brand Finance
Top 500 Global Brands

• Expectations
According to one report, India as well as other nations, such as European nations[, have great
expectations from the Nano and are keenly and eagerly eagerly awaiting it, especially the
electric version of the Nano.

• Modular design
In fact, Tata envisions going even further, providing the tools for local mechanics to assemble
the car in existing auto shops or even in new garages created to cater to remote rural
customers. With the exception of Manjeet Kripalani, BusinessWeek's India bureau chief, few
have focused on this breakthrough element of the Nano innovation (BusinessWeek.com,
1/10/08).

• Pricing strategy
Tata initially targeted the vehicle as "the least expensive production car in the world"—
aiming for a starting price of 100,000 rupees or approximately $2300 US despite rapidly
rising material prices

• Export expectation
Being world’s cheapest car it is expected that not only India demand for Nano will go rise at
global level. Since it meeting Euro-4 norms at this price so this is taking as a future of small
car segment.

• Reputation and Acceptance of Tata After launch
“TATAs have shown the world what Indian engineering is truly capable of”
Financial Times U K reports

• Enthusiastic support
Tata Motors is receiving preliminary and some very enthusiastic support in the media and
officials, even from Europe, for the electric-version from India as well as other-nations. The
enthusiasm is even higher than that for the petrol-version

27


FUTURE OF NANO

• Will the Nano succeed?
• Car of the Future?
• Is it fair to blame the Nano for the (upcoming) ills of Indian road infrastructure?
• What do you think? Is the Nano a car of the future? Or just another Yugo debacle
waiting to happen? Would you drive one?

• Emerging markets are a fertile ground for innovation. The challenge of reaching dispersed,
low-income consumers in emerging markets often spurs significant innovation.
• As customers gain more power, they will demand more tailoring and value-added service to
meet their needs. Companies that innovate on this dimension are likely to be richly rewarded.
• World is getting tougher day by day being unique is a competitive advantage. Expectations to
Nano has proved this .
• After 100 years to Henry Ford , Tata has proved him again not only he came out of the
expectations but also came out with a platform for Indian auto sector .
• So this as per this project conclusion can be draw as a future car not only of Indian but also if
exported than could be to the world.
These are the automobile Car Company of the India.

This is something I'm going to talk about at the launch. For now, let me just say our car will cause
less pollution than a two-wheeler.

I'm trying to think of a parallel where someone has introduced a product at a disruptively low price
and changed the market. A good example would be the Swatch watch, low-cost, trendy and with a
wide range. Did Swatch finish off the Swiss watch industry? No (in fact, it was a Swiss company that
created Swatch, the same company that produced Omega). Did it finish off Citizen and Seiko and
other Japanese competitors? No. Did Swatch cause the Japanese and others to produce something
like the Swatch? Yes, it did, but Swatch continued to dominate its niche.

28


COMPETITION ANALYSIS

The Structure of the competitor: Michel Porter has identified five forces that determine the intrinsic
long run profit alternativeness of a market segment: Indutry Competitions, Potentials Entrants,
substitudes, buyuer and suppliers. His model is showing in following figure.

Potentials
Entrants

Threats of new Entrants

Bargaining Bargaining
power of power of
Suppliers. Buyer

Suppliers. Buyers
INDUSTR
Y

Threats of
Substitute’s
products
Or services

Substitutes

(1)Threats of intense segment rivalry: segmentation is unattractive if it already contains numerous,
strong or aggressive competitors.Maruti 800, Maruti Omni, Spark

(2) Threats of new Entrants: segmentation attractiveness varies with the height of its entry barriers. he
most attractive segmentation is one in which entry barriers are high and exit barriers are low. Few new
firms can enter the Industry and poor performing firms can easily Exit.
• In every month one Car to be Launched by many Automobile Industry.

(3)Threats of substitutes Product: segmentation is unattractive when there are actual or potential
substitutes for the product.substitudes place a limit on Price and Profits.
• Two wheelers like Bikes, Scooter and moped
• Battery Vehicles
• CNG Vehicles

29


(4)Threats of buyers “Growing” bargaining power: segmentation is unattractive if the buyer’s
posse’s strong or growing bargaining power. Buyers bargaining power grows when they become more
concentrated or organized.
• People are Conscious about price and Quality
• Wrong perception of Customers about Nano as loe prices lead to poor quality , Mileage

(5) Threats of suppliers “Growing”Barganing power: segmentation is unattractive if companies
suppliers are able to raise price or reduce quantity supplied. Suppliers tend to be powerful when they
concentrate or organized.

30


MARKET SEGMENTATION

Segmenting Consumer Market:

Two broad groups are used to segment Consumer Market. Some researchers try to form segment by
looking at descriptive characteristics; Geographic, Demographic and Psychographic. Then examine
whether these Consumer Segment exhibited different needs or products responses.
Other researchers try to form segments by looking at “Behavior” Consideration, such as consumer
response to benefits, the use occasion, or Brand. Once segment are formed. these researchers sees
whether different characteristics are associated with each consumer response segment. For Example
researchers might examine whether people who want “Quality” rather than “Low Price” in buying
Auto Mobile differ in their Geographic Demographic and Psychographic make up.
The major segmentation variables are - Geographic Demographic and Psychographic and Behavioral
Segmentation.

GEOGRAPHIC:
1.Region North Gujarat
2.City Gandhinagar
3.Rural And Semi Urban Area Rural villages with a population over 10,000; semi
urban Areas; small towns with population between
20,000 and 50,000
DEMOGRAPHIC:
Age >18
Family Size >5
Gender Male or Female
Income > 10,000/month
Occupation Student, Govt Service, Private Service, NGO, Any
Other.
PSYCHOGRAPHIC:
Lifestyle Culture oriented, Sports oriented, Outdoor oriented
Compulsive,Gregarious,Authoritarian,Ambitious
Personality
BEHAVIORAL:
Occasions Regular, Special
Benefits Quality,Service,Economy,Speed
User Status First time user, Regular user
User Rate Heavy
Loyalty Status Strong, Absolute
Readiness Stage Aware, Informed, Interested, Desirous
Attitude towards Product Enthusiastic, Positive

31


GEOGRAPHIC SEGMENTATION

Geographic Segmentation

Geographic segmentation calls for dividing the market into different geographical units such as
nations, states, regions, countries, cities or neighborhoods. In the Indian context geographic
segmentation assumes importance due to variations in consumer preference & purchase habits across
different regions and states of the country.

One of the major geographic segmentation variables relevant for marketers in India is the division of
markets into rural and urban areas. Differences in urban & rural markets, based on different
parameters including market potential, have major implications for marketers. The need to segment
the market geographically becomes clearer when we look at some of the characteristics of the
market. In India, there are more than 5000 towns & over 638000 villages.

Geographic markets also vary in their product requirements. In arid regions of western India such as
Rajasthan & Gujarat during hot & dry summer seasons, air coolers are used. However, this product
ineffective in areas like where climate is hot & humid during summer.

DEMOGRAPHIC SEGMENTATION:

Demographic Segmentation:

Demographic Segmentation divides the market into groups on the basis of variables such as age,
family size, life cycle, gender, income, occupation, education, religion, nationality, race, generation,
& social class.

(a) Age: The age of consumers of Tata Nano are generally above 18 which is minimum required for
driving the car in India.

(b) Family Size: Generally the families of four to five members prefer to purchase the Tata Nano
because it is more suitable than any other cars like 800 as per body size Maruti 800 is big then Nano
but internally it has 30% more space than 800.

(c) Gender: Generally the gender does not affect the demand of Tata Nano because both male &
female drive this car but male appears much driving the Nano

(d) Income: The income of consumer is one of the most affecting factors. The family or the person
whose income is Rs. 10,000& Per Month can afford the Tata Nano.

32


PSYCHOGRAPHIC SEGMENTATION

Psychographic Segmentation

Psychographics is the science of using psychology & demographics to better understand consumers.
In psychographic segmentation, buyers are divided into different groups on the basis of
psychological/personality traits, lifecycle, or values.
Psychologically is called Life Style segmentation.

(a) Lifestyle: The lifestyle of the consumers plays an important role in the choice of cars. Generally
the consumers of Lower middle class prefer to buy the Tata Nano because their lifestyle neither
too much high nor too much low.

(1) Needs Motivation : If we see the advertise of Tata nano then we can understand about the car,
in every media of the advertisement like, News paper, Television, Radio we can see or here some
attractive news or information like Milage,Colour,Design,Speed,Price,Discount Loan System, from
that we can Motivate our self for purchase that car.

There are two types of Needs

(A)Innuate Needs: Relation with body, its called Primary Need Exam-Food, Water
(B)Enquired Need: as per the Society you have to full field they needs, it’s called Secondary Needs.

MOTIVATIONAL PROCESS

(2) Perception: Perception is very basic and fundamental factor which directly or indirectly
motivates or de-motivates people for purchase any thing.

People have positive attitudes toward Tata Motors of the providing excellent services provides by
Tata Steel and Tata Motors.

33


BEHAVIORAL SEGMENTATION

Behavioral Segmentation

In Behavioral Segmentation, buyers are divided into groups on the basis of their knowledge of,
attitude toward, use of, or response to a product.

(A)OCCASIONS: The car generally for the regular purpose of the family & also special occasions.
Indian people are very traditional so they buy car at the special occasions like on Birth Day, Marrige
Anniversary or any Festival like Diwali,Dasera, Akhatri Bij and others.

In India at on these occasions selling volume of the Car is always increasing every year.

34


RESEARCH OBJECTIVES:

What is research? In simple words, research is the study of materials and sources in order to
establish facts and to reach at new conclusions.

According to American Marketing Association “Research is the systematic and objective
identification, collection, analysis, dissemination, and use of information for the purpose of assisting
management in decision making related to the identification and solution of problems (and
opportunities) in marketing.”

Any research or study starts with Question or problem and research is undertaken to get the solution.

Following are the objectives to undertake the research.

The very first step in marketing research process is to define carefully the objectives of the study. It
is important for the researcher to agree art the outset on the purpose and objectives of the study to
ensure that the research design is appropriate. A carefully thought out statement of objectives helps
to define the types and the level of information.

Types of Research:

There are mainly two types of market research the first one is problem Identification and second one
is problem solving market research.

1.) Problem Identification Research :

Research that is undertaken to help to identify problems which are not necessary apparent on the
surface and yet exist or are likely to arise in the future. For example, what will be the consumer’s
behavior while making decision for purchasing “Tata-Nano” car and to know the consumer
response whether it will be negative or positive.

2.) Problem solving Research :

Research is undertaken to solve specific marketing problems. For example, After putting “Tata-
Nano” in market and there will be negative response and low demand for it then to find out the
reasons for its negative demand in the market and to find out those reasons through research.

For example, “Tata-Motors” also undertake research to get the answer of following questions
Before they take decision to launch a new small car or not.

1. Who are my customer and potential customer?
2. What kind of people they are?
3. Where do they live?
4. Can and will they buy?

35


Research helps us to get the answer of above mentioned questions.

Thus, research helps producer to collect the information which reduces business risk. It helps
producer to identify sales opportunities and to develop action plans.

Following are the objectives of this Study:

Research is undertaken for following reasons.

1. To know awareness of potential customers about “NANO”

2. To Know the Perception of people toward pre-launched Tata Nano Car.

36


RESEARCH METHODOLOGY

Types of Research Design Exploratory research Design
Source of Data A. Primary data : Survey method
B.Secondary data : Internet, Magazine, News papers
(Economics Times, Business Standard & Gujarat
Samachar,ICFAI General)
Research Equipment Questionnaire
Sampling Technique Non Probability Technique - Convenience sampling method
Sample Size 150 Samples

Area of Research Gandhainagar

Research design:

Classification of Research Design: there are main two types of Research Design.

Research Design

Exploratory Research Conclusive Research

Descriptive Research Casual Research

We had considered exploratory research design for my project in order to know awareness of the
potential customers and I want to know the willingness of potential customers to buy “Tata-Nano”
car. For this study, I have considered exploratory research and descriptive research to know the
awareness and purchase intention of potential customers as well as to know the characteristics of
groups such as respondent’s age, their gender, education, income, occupation etc.

Sources of data:

To study the problem and to reach at conclusion , data are essential which are collected from
following sources.

Sources of Data

37
Primary Data Secondary Data


1. Primary Data : It means Data originated by the researcher for the Specific Purpose of addressing
the research problem. “Primary Data are collect to conduct the study and helped to reach at the
conclusions from the findings.
In this study , the primary data were obtain by survey method with the help of structured
questionnaire. Data were collected with the help of the response of respondents, they provide
information through questionnaire.

2. Secondary Data : “It means that Data collected for some purpose other than problem at
hand”. In this study, the secondary data obtained from the websites, newspapers and
Magazines.

Survey Methods:

The Survey method involves a structured Questionnaire, given to respondents which is designed to
obtain response or reaction for specific information.

There are four survey methods.

Methods of Survey

Personal Telephonic Mail Electronic
Interviewing Interviewing Interviewing Interviewing

In-Home Interview Mall Intercept Computer Assisted

To collect the primary data, I have used personal interviewing method. Respondents were
interviewed at their home, so, I relied upon in-home survey method. Respondents were interviewed
face to face at their homes. The task of Interviewer is to contact respondents, ask the questions and
record their response.

Research Instrument:

To obtain Primary data for this research I used survey method by designing Questionnaire.”
Questionnaire is a structured technique for data collection that consists of a series of questions,
written or verbal that a respondent answers.” Questionnaire is a set of a questions through which we
can obtain necessary information from respondents.” We can collect the information such as the
behavior, attitude of respondents etc . . . . We can also understand facts, their awareness, belief and
their future action plans.

38


Types of Questions

Structured Electronic
Questions Interviewing

Multi- Open- Closed-
Ranking Scale Dichotom Ended Ended
Choice
ou

We had collected information from respondents with the help of structured questions using multi
choice questions, dichotomous and ranking questions for the primary Data.

Sample and Sampling: -Sample means the unit or segment of the population selected for
investigation or search. Sampling is the Procedure by which using a small number parts of the whole
population we reach up to conclusion regarding the whole population. There are mainly two types of
sampling techniques are given below.

In this study, to get Information from respondents, we had considered
non probability sampling technique and select sample from total population through convenience
sampling method. In non probability sampling technique the chances of selection of all elements of
population are not equal and convenience sampling method means sample drawn at the convenience
of the interviewer people tend to makes the selection at familiar location and choose respondents
who are like themselves.

39


DATA INTERPRETATION AND ANALYSIS

(1) Gender:
Gender

44
Male
Female
106

Male 106 Respondents are male
Female 44 Respondents are female
Total 100 Respondents

(2) Age:

Below 20 Respondents age are below 20 Years
20-25 Respondents age are between 20 to 25 Years
Above 35 Respondents age are above 35 Years

40


(3) Occupation:

Student 35 Respondents age are Student
Govt Service 60 Respondents age are Govt Service
Private Service 38 Respondents age are Private Service
NGO 03 Respondents age are NGO
Any Other 14 Respondents age are Any other

(4) Monthly (Family) Income:

Monthly Income

14
37 Below 10000
31
10000-15000
15000-20000
20000-25000
29 Above 25000
39

Below 10,000 14 Respondents were Monthly Family Income Below 10,000
10,000 – 15,0000 31 Respondents were Monthly Family Income 10,000 – 15,0000
Above 25,000 37 Respondents were Monthly Family Income Above 25,000

41


(5) Family Members:

Family members

20
43

Below 3
3--5
Above 5

87

Below 3 From 150 Responded 20 Responded have below 3 Family Members
3-5 From 150 Responded 87 Responded have 3-5 Family Members
Above 5 From 150 Responded 43 Responded have Above Family Members

(6) Are you from the urban area or rural area?

Area

29

Urban
Rural

121

Urban 121 Responded are from Urban area
Rural 29 Responded are from Rural area

42


(7)Do you have any vehicle?

Vehicle

20

yes
No

130

Yes 130 Responded have Vehicles
No 20 Responded have not Vehicles

If yes, then which type vehicle do you have?

Types of vehicle

14 21
Moped
31
Scooter
36
Motor-Cyclle
Car
Any Other
67

Moped 21
Scooter 36
Motor-cycle 67
Car 31
Any other 14

6 Responded have Moped & scooter
8 Responded have Moped & Motor Cycle
2 Responded have Moped & any other Vehicles
6 Responded have Moped & car
8 Responded have scooter & Motoe Cycle

43

A project report on tata nano pre launch survey

A project report on tata nano pre launch survey

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