India is home to more than one billion people, but only a small percentage of them own four-wheelers.

Most middle-class people, on the other hand, cannot afford one. Despite the dangers of road safety and
the weather, families of four or five people can get around on a two-wheeler. This case study is based on
how Tata saw this challenge faced by Indian middle-class people and decided to manufacture a low-cost
automobile for them. It also depicts the hurdles that Tata Motors had in developing this low-cost car, as
well as how they overcame them to make it a success story for the firm and a market benchmark. The
car was being manufactured with the objective of giving relief to the middle-class people
who aim to own a car. The company used a top-down approach to reach their target of making this car
at their set price, they first set the price at which the car will be offered to customers and then they
worked out how to achieve this price at the minimum cost. This case study was chosen because it
demonstrates how Tata Motors worked to build the world's cheapest car, which is priced at one lakh
Indian Rupees after considering the overall income of the people and make it an affordable car for
all. The Nano, as the world's cheapest car, was meant to migrate millions of
Indians from two wheels to four and prove India's supremacy in frugal
manufacturing just as Henry Ford's Tin Lizzie had established the moving
assembly line  
The case study is based on a low-cost car designed specifically for the Indian market by Tata Motors
after witnessing the difficulty, or danger, that Indians face when travelling. It also shows Tata Motors'
challenges in developing this low-cost car, as well as how they overcame them to make it a
success storey for the company and a market benchmark. To achieve their goal of creating this car at
their specified price, the corporation took a top-down approach, determining the price at which the car
will be provided to customers first, and then figuring out how to achieve that price at the lowest
possible cost. This case study was chosen because it highlights how Tata Motors managed to create the
world's cheapest automobile, which costs 1 lakh Indian Rupees, by taking into account people's whole
income and making it an affordable vehicle for the people.  
  
  
 
 
  
There are APM’s 12 Factors for Success but below are some of the important factors from the case.  

1. Effective governance -  

2. Goals and objectives – The project's purpose was to target low

income consumers and design an automobile that they could afford, as this was a big unexplored market
. The goal of the project was to make world’s cheapest car to be priced at Rupees one lakh for the Indian
market people. The company objective was to give Indian market the cheapest car of the decade which
can replace the use of two wheelers and that would provide a safe means of transport.
It was envisioned as a more suitable alternative to a two-wheeler. It was designed with the goal of
improving people's lives and giving safety to millions of Indians, and it was marketed as the "Family Car,"
meaning it was affordable to every Indian (Breuer and Upadrasta, 2017). Ratan Tata, Tata's group chief,
has been driving the Nano's development for years, seeing an opportunity to give a safe, pleasant mode
of transportation to millions of families who commute with their family of 4-5 people in two-wheeled
cars in terrible weather (Gandikota, 2014).

3. Commitment to project success – Every member of the project team was dedicated to making it a
huge success, and they worked tirelessly to solve any problems that arose in the process of making the
Tata Nano cost-effective and within their budget. 

4. Capable sponsors - 

5. Secure funding – Tata Motors is one of India's leading commercial and private automobile
manufacturers. (Tata Motors Limited, 2021). It worked in a joint venture with FIAT Motors to
manufacture the vehicles (Tata Motors Limited, 2007). The company also has many foreign contacts,
allowing them to develop this vehicle independently. 

6. Project planning and review -   

7. Supportive organizations – The organization has complete faith in the vision of Mr. Ratan Tata the
owner of the company.  

8. End users and operators – The company was targeting only a section of society which is middle–
class people. They saw that middle class people with a family of four members owns two wheelers and
they try to manage their commute on that even after knowing the facts of road conditions so to
overcome this challenge the company developed the car at the similar price range near to two-
wheeler.  

9. Competent project teams - The team adopted by the Tata group was fully committed toward
achieving their goals it consists of engineering researchers' team of 500 people who worked day and
night to develop this car. The team also consists of some senior members with a great amount of
experience which helped them in achieving this goal. 
The company took four year to develop a strategy before starting the manufacturing process. Under
GirishWagh's leadership as design chief, a team of 500 engineers was established, with several
engineering teams responsible for various aspects of the Nano. A manufacturing team of 20 was formed
after a methodical process of interviews and reviews. Tata Motors also recruited graduates from outside
as well as from IIT Kharagpur and Jadavpur University (Gaur and Sahdev, 2015).
10. Aligned supply chain – Tata has put all its effort in establishing a good supply chain network starting
from procurement of raw material, manufacturing, assembling, transportation, and final deliver to
customer. They located the manufacturing plant is such a location which is near to all the facilities that
can help them reduce their costs. Tata Motors outsourced international companies for the parts to
make it cheap like Engine was developed by Bosch, Germany; For styling and designing, the I.DE.A
Institute and Trilix of Italy; Lightweight steering shafts were made by Sona Koyo of India; Johnson
Controls of America created the seating system; The engine cooling module was supplied by Toyo of
Japan; Behr of Germany provided the heating, ventilation, and air conditioning system; and Madras
Rubber Factory of India provided the durable rear tyres. Only through innovation throughout the
international supply chain was Nano able to meet its cost target (Gandikota, 2014).

11. Proven methods and tools – The Company used latest Japanese technique in manufacturing the Tata
Nano and also trained the employees in making the product as per this technique. They used the Kaizen
costing technique. 

12. Appropriate standards – The car was designed as per three key requirements – cost, regulatory and
acceptable standards. It also met the emission regulations accepted during that time and was made in
such a way that it can adapt to upcoming emission norms also. The company also made the car fuel
efficient which also benefited the environment by releasing less carbon footprints.  
  
 
 
  
Challenges 

1. Maintaining Target Price – The Tata group had the most difficult task because they established a
price objective that was unattainable according to competitors and the market. In order to make
the car light and low-cost, the firm revised the design such that the engine was kept at the back
end and the gasoline tank was kept at the front end. To lower the weight of the car, they
replaced steel elements with fiber and plastics. The car was cheap since it didn't have a radio,
power windows, air conditioning, an airbag, a remote lock, or power steering ( Ramesh, 2009).  

2. Mounting of Input costs- The other challenge for the company was input costs which are
variable in nature and can change very quickly that can affect the company target price. So the
company developed some of their own components to meet their target price.  

3. Environmental issues – The company also faced challenges from the environmentalist which
believes that producing the vehicle in such a huge quantity will affect the environment also this will
increase the amount of traffic on the roads making it more congested which will lead to increase in
pollution level. To company claimed that the vehicle is as per the Indian environmental standards
and emits 120 grams of carbon dioxide per kilometer which is very less compared to market
standards (Kanter, 2008).  

4. Safety issue – Since the car was small and made of cheap material the customers were of the
opinion that it would not be safe. There was another challenge with this car as it had its engine in
the rare part which in normal cars comes in the front end that can cause more damage to the driver
and the passengers in case of unforeseen circumstances. The company claimed that the car is made
keeping in mind all the safety standards and it is completely safe as a modern-day car and it exceeds
current safety standards. The car body is sheet metal body it consists of all the safety features like
intrusion-resistant doors, seat belts, strong seats and anchorages, crumple zones and rear tailgate
glass bounded to the body (Moore, 2008).  

5. Servicing and Repair Facilities - This car was designed differently as compared to other cars due
to which there was a concern about the servicing and repair part of it as the engineer is not qualified
to deal with this new age car. The other challenge was making a good network of service Centre. 

6. Durability and operational efficiency – As this type of car was new to Indian market there can be
challenge of durability as it depend on the different road conditions found in India which can affect
the car functioning. The car can also face challenges related to urban and rural areas as
urban area are having traffic congestion issues whereas rural area road conditions are not good that
can create an operational challenge for the car. 

7. Global competition – After the launch of this car many local and international companies are
now aiming to develop more and more small cars that will create a global market challenge for the
company. In the face of increasing global competition, the Company intends to maintain its low-cost
advantages in product development and procurement while closing the quality gap between its
products and those offered by competitors (Tata Motors, 2008). 
 
 
  
Recommendation  

 The Tata Nano case study is a great illustration of how to distinguish goals from objectives.
Technically, the business's goal of producing an automobile for Rupees one lakh was reached, but in
terms of sales, the company was struggling and falling short of expectations (Sampietro, 2016). The
company was targeting two-wheeler customers, and they expected that instead of buying a two-
wheeler, people would opt to buy this car. However, this plan backfired, and the car failed to meet
the customer's expectations. Although it met the customer's need for secure mobility and a desire
to purchase a vehicle, it fell short of their expectations (Mukherjee, J., 2021). This instance shows
that the brand should do much more market research before launching the product on the
market to understand the customers’ expectations without the fact that the project’s success is not
guaranteed.  
  
 
 
  
References 
  
 Tata Motors Limited. 2007. Fiat Group and Tata Motors announce establishment of Joint Venture
in India. [online] Available at: <https://www.tatamotors.com/press/fiat-group-and-tata-motors-
announce-establishment-of-joint-venture-in-india/> [Accessed 28 December 2021]. 
 Tata Motors Limited | Largest Indian Automobile Manufacturer. 2021. Automobile & Car
Manufacturer in India - Tata Motors. [online] Available at: <https://www.tatamotors.com/about-
us/company-profile/> [Accessed 28 December 2021]. 
 Ramesh, R., 2009. [online] Available at:
<https://www.theguardian.com/business/2009/mar/24/tata-nano-worlds-cheapest-car> [Accessed 29
December 2021]. 
 Kanter, J., 2008. Tata's Nano and Global Warming. [online] Green Blog. Available at:
<https://green.blogs.nytimes.com/2008/01/11/tatas-nano-and-global-warming/> [Accessed 29
December 2021]. 
 Moore, A., 2008. [online] Topspeed.com. Available at:
<https://www.topspeed.com/cars/tata/2008-tata-nano-ar50405.html> [Accessed 29 December 2021]. 
 Tata Motors, 2008. [online] Available at: <https://www.tatamotors.com/wp-
content/uploads/2015/10/GRI-report-07-08.pdf> [Accessed 29 December 2021]. 
 Sampietro, M., 2016. Project Team Members and Project Goals and Objectives. [online]
Pmworldlibrary.net. Available at: <https://pmworldlibrary.net/wp-
content/uploads/2016/08/pmwj49-Aug2016-Sampietro-Team-Members-Goals-Objectives-series-
article.pdf> [Accessed 29 December 2021]. 
  Mukherjee, J., 2021. Tata Nano: Case of Repositioning: Case Analysis. Vikalpa, 46(3), pp.188–
190. 10.1177/02560909211044253. 
   Breuer, H. and Upadrasta, V., 2017. Values-Based Product Innovation – The Case of Tata
Nano. [online] Available at: <https://www.researchgate.net/publication/317369548_Values-
Based_Product_Innovation_-_The_Case_of_Tata_Nano> [Accessed 2 January 2022].
 Gandikota, V., 2014. The Curious Case of TATA Nano car. [online] Tnfis.org. Available at:
<https://tnfis.org/the-curious-case-of-tata-nano-car/> [Accessed 4 January 2022].
 Gaur, L. and Sahdev, S., 2015. Frugal innovation in India: The case of Tata Nano. [online]
https://www.researchgate.net/. Available at:
<https://www.researchgate.net/publication/282791752_Frugal_innovation_in_India_The_case_of_Tat
a_Nano> [Accessed 4 January 2022].
  
  
  
  
Tata website - https://www.tatamotors.com/press/the-tata-nano-arrives/
The Tata Nano is actually a good example to show the difference between goals and objectives. From a
technical perspective the project objectives were met, while the goals, in term of sales, were
not. (Sampietro, 2016)  
 Sampietro, M., 2016. Project Team Members and Project Goals and Objectives. [online]
Pmworldlibrary.net. Available at: <https://pmworldlibrary.net/wp-
content/uploads/2016/08/pmwj49-Aug2016-Sampietro-Team-Members-Goals-Objectives-series-
article.pdf> [Accessed 29 December 2021]. 
Tata Nano case study is an excellent example of showing distinction between goals and objectives.
Technically the company objective of making a car at Rupees one lakh was met but talking of in terms of
sales goal the company was struggling and not as per the company’s expectations.  
The Tata Nano case study is a great illustration of how to distinguish goals from objectives. Technically,
the business's goal of producing an automobile for Rupees one lakh was reached, but in terms of sales,
the company was struggling and falling short of expectations (Sampietro, 2016). 
 
India is home to more than one billion people, but only a small percentage of them own four-wheelers.
Most middle-class people, on the other hand, cannot afford one. The case study is based on a low-cost
automobile manufactured by Tata Motors specifically for the Indian middle class people after seeing
the difficulty, or risk, that they confront when travelling on a two wheeler. It also depicts the hurdles
that Tata Motors had in developing this low-cost car, as well as how they overcame them to make it a
success story for the firm and a market benchmark. The car was being manufactured with the objective
of giving relief to the middle class people who aims of own a car. The company used a top
down approach to reach their target on making this car at their set price, they first set the price at which
the car will be offered to customer and then they worked out how to achieve this price at the minimum
cost. This case study was chosen because it demonstrates how Tata Motors worked to build the world's
cheapest car, which is priced at one lakh Indian Rupees after considering the overall income of the
people and make it an affordable car for all. The Nano, as the world's cheapest car, was
meant to migrate millions of Indians from two wheels to four and prove India's
supremacy in frugal manufacturing just as Henry Ford's Tin Lizzie had
established the moving assembly line  
  
  
In India, more than one billion people are residing, but only a section of the society—the so-called
upper class and upper middle class, is having a four- wheelers. But, middle class people cannot
afford a car. Even families with four or five members are trying to manage with two-wheelers despite
risks related to road safety and weather conditions. However, the revolutionary Tata Nano is set to
provide a great relief to these people. The launch of the Nano has been correctly timed with
the economical growth. Right now, our economy is growing at 9% and overall Gross Domestic
Product (GDP) is a trillion dollars. When calculating the per capita income of Indians the average
income is $500 (approximately Rs. 18,000), which indicates that even a common man can afford the
competitive price of Rs. 1 lakh of a Nano.