A STUDY ON

“Consumer perception and future potential for TATA NANO.”

Submitted in partial fulfillment for the award of the degree Master of Business Administration Chhattisgarh Swami Vivekanand Technical University, Bhilai

Submitted by, Richa Vohra MBA – Semester II (Session 2008-2010)

Shri Shankaracharya Institute of Management and Technology
Junwani, Bhilai (C.G.) - 490020

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CERTIFICATE This is to certify that the project “A study on consumer perception and future potential for TATA NANO” submitted to Shri Shankaracharya Institute of Management & Technology, Bhilai in partial fulfillment of the requirement for the award of Master of Business Administration (MBA) is a bona fide work carried out by Richa Vohra, a student of MBA II Sem, under my supervision and guidance. The project was carried during 1.06.09 to 10.07.09 in Sairam Automobiles & Services Pvt. Ltd.

Date: Richa Vohra Mr. Narendra Sahu M.B.A (2008-2010) SM. (Sairam Automobiles & services Pvt. Ltd.)

DECLARATION I, Richa Vohra a student of MBA II Semester 2008, at Shri Shankaracharya Institute of Management & Technology hereby declare that this Project Report under the title “A Study on Consumer perception & future potential for TATA NANO” is the record of my original work under the guidance of MR. NARENDRA SAHU. This report has never been submitted to anywhere else for award of any degree/diploma.

Place: Bhilai Richa Vohra Date: MBA – Semester II

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ACKNOWLEDGEMENT It is a proud privilege on my part to express my sincere and humble gratitude to all those people who have helped me directly or indirectly in the completion of this project. I thank venerated Mr.NARENDRA SAHU (C.M), who gave me an opportunity to undergo my project in Sairam Automobiles & Services and extend their valuable help and guidance throughout my project. I pay sincere thanks who spent his valuable time and knowledge and gave me wholehearted support and encouragement in carrying out this project. I thank all those executives and non executives of Sairam Automobiles & Services who spent their valuable time in interacting and giving their personal time in interviewing them. Finally, I thank all the team members for interacting and sparing their valuable time with me whenever possible

. Richa Vohra M.B.A (2nd year)

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TABLE OF CONTENTS
PAGE NO Acknowledgement DECLARATION CERTIFICATE TABLE OF CONTENTS EXECUTIVE SUMMARY 1. INTRODUCTION 1.1 1.2 1.3 TO THE COMPANY

Various product of TATA MOTORS Shareholding patterns of TATA MOTORS SWOT analysis of the company

2. INTRODUCTION TO THE TATA NANO 2.1 2.2 2.3 2.4 2.5 Financial projection Technical overview Vehicle summary Supplies of TATA NANO Controversies involved

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3. RESEARCH METHODOLOGY

4. DATA ANALYSIS AND RESULTS

5. INTERPRETATION OF FINDINGS

6. RECOMMENDATIONS 7. LIMITATIONS . 7. CONCLUSION v. REFERENCES APPENDICES

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EXECUTIVE SUMMARY

Tata Nano is the cheapest car in the world. It is sold in home country India around Rs 1 lakh i.e. approximately USD 2000. It is manufactured by Tata Motor Limited, the largest to automobile company in India. It’s Chairman, Mr Ratan Tata envisions that Tata Nano become a “People’s car” which is affordable by almost everybody. Tata Nano was first launched in India on 1 st April 2009 and expected to be in Indian market by July 2009. Since launching, it has created a huge buzz all over India. Within the first two days of lunching, it has received 5500 booking. The figures keep increasing every day since the launching. What makes Tata Nano so cheap? Basically, by making things smaller, lighter, do away with superficial parts and change the materials wherever possible without compromising the safety and environmental compliance. It is said that Tata Nano has better mileage than Toyota Prius and same gas emission as a scooter Tata Nano will be imported to Malaysia by Tata Industries in parts. It will be assembled in its two factories i.e in Shah Alam, Selangor and Pasir Gudang, Johor Bahru. There are four distribution centres in Peninsular Malaysia i.e. in Kuala Lumpur, Penang, Johor Bahru and Kuantan. All Tata Nano cars will be distributed through these distribution centres only. Order can. be made vide these distribution centres or its web site. There are three types of Tata Nano car available i.e. Tata Nano, Tata Nano CX and Tata Nano LX. However, due to hot weather in Malaysia, only Nano CX will be brought to Malaysia and will be sold here. The selling price of Nano CX in Malaysia is RM 13,704 per unit. It is estimated that gross profit for the first year would yield xxx, second year xxx and third year xxx Estimated monthly instalment payment is xxx for seven years period. With this price, the target market is very wide which includes those with income RM 2000 per month, students female workers and scooters’ riders

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INTRODUCTION TO THE COMPANY

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 corporation 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 was established in 1945, when the company began manufacturing locomotives. The company manufactured its first commercial vehicle in 1954 in a collaboration with Daimler Benz AG, which ended in 1969 Tata Motors was listed on the NYSE in 2004, and in 2005 it was- ranked among the top 10 corporations in India with an annual revenue exceeding INR 320 billion. In 2004, it bought Daewoo's truck manufacturing unit, now known as Tata Daewoo Commercial Vehicle, in South Korea. It also, acquired a 21% stake in Hispano Carrocera SA giving it controlling rights in the company. Tata Motors launched the Tata Nano, noted for its Rs100,000 price-tag, in January 2008. In March 2008, it finalized 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 2 June 2008 Tata Motors has its manufacturing base in Jamshedpur, Pantnagar, Lucknow, Ahmedabad and
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Pune.

1. History

Tata Motors launches its first truck in collaboration with MercedesBenz.Tata Motors is a part of the Tata and Sons Group, founded by Jamshedji Nussarwanji Tata and J Baker. The company was established in 1945 as a locomotive manufacturing unit and later expanded its operations to commercial vehicle sector in 1954 after forming a joint venture with Daimler-Benz AG of Germany.

Various Products of TATA Motors
[1] Passenger cars and utility vehicles

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Tata Indigo SW • • • • • • • • • • • Tata Tata Tata Tata Tata Tata Tata Tata Tata Tata Tata Sierra Estate Sumo/ Spacio Safari Indica Indigo Indigo Marina Winger Nano (3RD March 2009) Xenon XT Xover (2009)

[2] Concept vehicles

Tata Cliffrider • 2000 Aria Roadster • 2001 Aria Coupe • 2002 Tata Indica • 2002 Tata Indiva • 2004 Tata Indigo Advent • 2005 Tata Xover • 2006 Tata Cliffrider • 2007 Tata Elegante • 2009 Tata Prima [3] Commercial vehicles

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Tata 1616 Starbus

Tata Marcopolo Buses in the Delhi BRT .

Tata Star Bus in Nagpur, Maharashtra. Tata Low Floor Buses are also used by administrations in Delhi, Mumbai, Pune, Udaipur and Indore • • • • • • • • • • • • • • • • • • Tata Tata Tata Tata Tata Tata Tata Tata Tata Tata Tata Tata Tata Tata Tata Tata Tata Tata Ace TL/ Telcoline /207 DI Pickup Truck 407 Ex and Ex2 709 Ex 809 Ex and Ex2 909 Ex and Ex2 1109 (Intermediate truck) 1510/1512 (Medium bus) 1610/1616 (Heavy bus) 1613/1615 (Medium truck) 2515/2516 (Medium truck) Starbus (Medium Bus) Globus (Low Floor Bus) Marcopolo Bus (Low Floor Bus) 3015 (Heavy truck) 3118 (Heavy truck) (8X2) 3516 (Heavy truck) 4923 (Ultra-Heavy truck) (6X4)
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• Tata Novus (Heavy truck designed by Tata Daewoo) [4] Military vehicles • Tata LSV (Light Specialist Vehicle) • Tata 2 Stretcher Ambulance • Tata 407 Troop Carrier, available in hard top, soft top, 4x4, and 4x2 versions • Tata LPTA 713 TC (4x4) • Tata LPT 709 E • Tata SD 1015 TC (4x4) • Tata LPTA 1615 TC (4x4) • Tata LPTA 1621 TC (6x6) • Tata LPTA 1615 T

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Introduction to the TATANANO
The Tata Nano is a proposed city car debuted by India's Tata Motors at the 9th annual Auto Expo on January 10, 2008 at Pragati Maidan in New Delhi, India. Called the people’s car in Tata's promotional material, it was projected to be the least expensive production car in the world. The standard version of the Nano is projected to sell for Rs. 100,000 (approximately US $2500, GBP
1277, or € 1700) , not including fees or delivery. Newsweek

identifies the Nano as a part of a "new breed of 21st-century cars" that embody "a contrarian philosophy of smaller, lighter, cheaper" and portend a new era in inexpensive personal transportation — and potentially, "global gridlock". The Wall Street Journal confirms a global trend toward small cars, led by the Nano. The prefix "Nano" derives from the Greek root 'nanos', meaning dwarf — as with nanometer. "Nano" also means "small" in Gujarati, the native language of the Tata family, founders of the Tata Group.

History and conception
The project to create a 1 lakh (1 lakh = 100000 rupees) car began in 2003, under the Chairman of Tata Motors, Ratan Tata. The strategy behind the project was the awareness of the number of Indian families who had two wheeled transport, but couldn't afford a four wheel car, and was based on the company's success in producing the low cost 4 wheeled Ace truck in

May 2005.

The Nano was unveiled at the 2008 New Delhi Auto Expo.
Industry convention was that a reliable car couldn't be made at such a low price, so initial media speculation was that the car
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would be a simple four-wheeled auto rickshaw. However, The Times of India reported that the vehicle is "a properly designed and built car". The Chairman is reported to have said, "It is not a car with plastic curtains or no roof — it's a real car." During development the company reinvented and minimized the manufacturing process, brought in innovative product design, and asked component manufacturers to look
at current work and design approaches in a different perspective to produce logical and simple solutions. The car was designed at Italy's Institute of Development in Automotive Engineering, with Ratan Tata ordering certain changes during the process, such as reducing the number of windscreen wipers from two to one.

Financial projection: 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. Tata Motors has been able to cut down the cost of the car by making things smaller and lighter, doing away with superficial parts and changing material wherever possible. Tata Motors company had received lakhs of enquiries through the internet for the Nano. Tata Motors intends to open bookings for the car three months from now. Tata Motors plans to produce 2,50,000 Tata Nano Cars in the first phase and add 1,00,000 in the second phase, taking the total production capacity to 3,50,000 cars probably by the end the next financial year As of August, 2008 material costs have risen from 13% to 23% over the car’s development, and Tata now faces the choice of introducing the car with an artificially low introductory price, raising the price of the car, or foregoing profit on the car — the latter an unlikely proposition., while an increased price on the Nano will likely decrease demand
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Technical overview: Design The People’s Car, 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 metres, width of 1.5 metres and height of 1.6 metres, with adequate ground clearance, it can effortlessly manoeuvre on busy roads in cities as well as in rural areas. Its monovolume design, with wheels at the corners and the powertrain at the rear, enables it to uniquely combine both space and manoeuvrability, which will set a new benchmark among small car

Engine

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Unlike other low cost Indian cars, this one is going to have a variomatic gear system. Instead of manual gear box in conventional cars it is coming up as gear less or rather with an automatic gear transmission. This helps to improve the efficiency & mileage by magnifying the torque output. As in international markets, the compact car from Tata 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. Rear mounted engine also help in reducing the power loss during transmission. The car will have front disk and rear drum brakes. The company claims mileage of 22 kmpl in city and 26 kmpl on highway. Fuel Efficiency The People’s Car has a rear-wheel drive, all-aluminium, two-cylinder, 623 cc, 33 PS, multi point fuel injection petrol engine. This is the first time that a two-cylinder gasoline engine is being used in a car with single balancer shaft. The lean design strategy has helped minimise weight, which helps maximise performance per unit of energy consumed and delivers high fuel efficiency. Performance is controlled by a specially designed electronic engine management system. Safety & Comfort By adhering to the fact that less weight requires less power, the 1 lakh car is made of light weighing steel. This has made the Tatas come up with a cheap alternative with out compromising on safety and performance. The base model will feature glass windows that can be cranked up. The tail lights are expected to appear like as in Tata Indica. Higher versions will have the comforts of power steering,
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power windows, air-conditioning and much more. With an all sheetmetal 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

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 (4.03km²) 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 has threatened to stall the manufacture of

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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 unveiling of the Nano. It will be a tragedy if such a mega investment and employee generating project by one of India’s most respected company is lost to West Bengal on account of a failure of communication among its stakeholders. It’s time that we as a nation begin to think of such projects as national projects and not become captive to immediate impulses. There cannot be and must never be any contradiction between industrialisation and welfare of farmers. In a democracy, the sensitivity of all stakeholders have to be addressed and in the context of land acquisition controversies, the new law of land acquisition and rehabilitation, proposed by the UPA government, is the way forward. If the Tata withdraws from the Nano project in West Bengal, investors’ sentiments will be hurt, and the only way for the company to move forward is for all concerned to ensure a political atmosphere conducive for investment. The Nano has 34 patents on the car’s design itself, which is a cause for national celebration as it represents a major technological and manufacturing feat in the automotive sector. All projects of technological excellence and originality that give India a special place in innovation and unique competitive advantage, should be treated as national projects. The state government should ensure the farmers are justly compensated in terms of price for their land and employee opportunities in the car project through suitable policy initiative. Democratic government is all about dialogue and moderation, and we hope that the West Bengal government will initiate purposive dialogue with all concerned. After
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all, his unfortunate controversy must be resolved to the satisfaction of all stakeholders through dialogue alone.

Latest At Singur: In Tata Motors’ long term interests Singur has become a flash point and a hot bed for political activity. The average Indian will however be synonymous with Singur as the chief production facility of the World’s cheapest car. The much talked about 1 lakh people’s car or the Nano. This statement is the first clear indication by Ratan Tata that he isn’t interested in dealing with the violent politics of Singur. Ratan Tata is not the type of man who uses the media to play around which means that today’s statement is a forecast of what will happen unless things change at ground zero in Singur. For investors and shareholders of Tata Motors, this is a major development which could go either way for them and simultaneously their investments. If Tata Motors decide to move out then almost 2 years worth of work will have to be re-started somewhere else. Despite Tata’s confidence that they are capable of rolling out the Nano by October, future production will be hampered if they are forced to shift their project elsewhere. Singur has become a political issue between the government and the opposition over the government’s ‘capture’ of Farmer agricultural land. While the opposition alleges that some land has been forcefully acquired, while for some adequate compensation has not been paid; the

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important fact remains that violent methods are being used to deal with the situation. Farmers protesting the Tata plant have resorted to beating up the staff of the Singur plant .Serious bodily damage has been inflicted on the staff and family members of Tata Motors at Singur. This has been the main reason why Tata might very well pull out of Singur. For the state housing the Nano project, things are serious for West Bengal. The Nano project at Singur has put in around 1500 crores and will pump in even more once serious production begins. For a state that is in need of heavy investment, a fiasco like this will set a dangerous precedent and deter future investments by corporates in India and the World. Tata Motors if booted out of Singur might make their way to the state of Uttar Pradesh. Even Uttaranchal and Arunachal Pradesh with their lenient tax structures could be unlikely gainers. There are also the special economic zones of Gujarat and Karnataka that hold promise. If Tata decide to move, investors can take heart from the fact that despite delayed production and eventually sales, the Nano will still find takers.

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RESEARCH METHODOLOGY

Objectives
• To know the present Consumer Perception about TATA NANO. • Finding future potential for NANO.

Data collection
There are two types of data collection method use in my project work report. -Primary data -Secondary data. For my project, I decided on primary data collection method for observing consumer perception for TATA NANO and approaching customers directly in the field, comparing and references to know their preference. In survey approach .I selected a questionnaire method for taking a customer view because it is feasible from the point of view of my subject & survey purpose. I decided on secondary data collection method was used by referring to various websites, books, magazines, journals and daily newspapers for collection information regarding project under study Sample size :- The sample size is 330

Sampling method:- The consumers are selected by the simple random method

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qestionnaire
Dear respondents, I am a student of Shri Shankracharya institute of management & technology. As a part of my curriculum I am conducting a study on “consumer perception & future potential for TATA NANO ” It would be a great help if you please spare some of your time to fill this questionnaire. The responses would be kept strictly confidential & use to data analysis
A) Name ----------------------------------------------------B) Age -------------------------------------------------------C) Designation ---------------------------------------------1. What is the first thing, which comes into your mind when you think about NANO? a. b. c. d. cheap economical affordable compact

2. Instead of purchasing a Bike, will you prefer to go for the NANO? 1. Yes 2. No 3. Can’t say 3. Which feature of NANO attracts you most, that inspires you to go for NANO? 1. 2. 3. 4. 5. 6. Price Design Mileage Interior space All the above Can’t say

6. Do you think NANO is people's car? 1. Yes 2. No 3. Can’t say 7. Will you recommend NANO to your friends and relatives? 1. Yes 2. No 3. Can’t say [16]

8. Which small car would you prefer to buy? 1. 2. 3. . 9. 1. 2. 3. 4. Maruti 800 Tata NANO Other………………. How long can you wait for NANO? 1-2 months 2-4 months 4-6 months Can’t wait

10. If the price of NANO rises, would you still purchase it? 1. Yes 2. No 3. Can’t say 11. Will Tata be able to maintain the price of NANO in future if there is hike in cost of raw materials? 1. Yes 2. No 3. Can’t say 13. Will there be traffic problem with the introduction of NANO on Indian roads? 1. Yes 2. No 3. Can’t say 14. Can you trust NANO for safety? 1. Yes 2. No 3. Can’t say

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