 Safer and more comfortable mode of transportation for family than a motorbike

o 12 car owners per 1000 people, dominated by two-wheelers-mopeds, motorcycles and

scooters because of their fuel efficiency, low purchase and maintenance costs and small
size, 76% of all vehicles sales in India are of two wheelers
o Inspiration for developing world’s smallest and most fuel-efficient car was the common
sight in India of family of four travelling on motorbikes
o Rs. 1 lac
o Cheaper alternate for safe mode of transportation
o Tougher competition in this segment due to price of motorcycles ranging from Rs. 35000
to Rs. 75000, mopeds as cheap as Rs. 15000
o However, India’s rapid economic growth resulted in a sizable middle class with
disposable annual income of Rs. 200,000 to Rs. 1,000,000
o Moreover, the 5% of the population that was middle class was expected to grow to 19%
till 2015, which means with increasing household income, the income dedicated to
transportation will also increase, it is expected to increase to 19% till 2015
o Absolute income levels however are still low and remain to be low even when after
being adjusted for purchasing power, this indicates that limited income and ingrained
orientation towards bargaining making Indian new Indian middle-class consumer a
tough customer
o Two wheelers were less expensive to operate due to high fuel efficiency; 70 km/liter vs
23.6km/liter, and lower maintenance costs
o Emergence of large middle, estimated at about 300 million people, together with young
population with bug aspirations made ideal customer base
o Only 10% conversion- 50% market share of the Indian car market
 Marketing it to consumers aspiring to car ownership
o Cheapest car- Rs. 1 lakh
o Roughly half the price of Maruti 800 (retail price of around Rs. 200,000)
o Maruti 800 has ac, more fuel tank capacity (15 liters bs 28 liters)
o Threat of future competition as other competitors issued statements about new ULC
cars with planned release dates
o Omitted air conditioning, power steering, power windows, anti-lock brakes, air bags and
dual windshield pipes
o High aspirations, low prices
 Specific segment such as college students based on its styling and maneuverability
o Maneuverability of two wheelers make them a favorite among college students

Tata Nano was a prime example of Tata’s promise of improving the quality of life guided by
product development