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Consumer Psychology – A Case Study on Tata Nano

-Shamim Akhtar ICFAI Member Mizoram
-Neeraj Athavale


• The automotive industry in india Automobile industry flourished with an average growth rate of 17 percent annually post liberaliszation • In 2009 industry produced more than 11 million vehichles .

and low maintenance cost • About 76 % of all vehicle sales in India are of 2 wheelers and remaining are passenger vehicle . versus 765 per 1000 in US and 426 per 1000 in UK • Two wheelers dominate Indian market due to fuel efficiency . per capita ownership of automobile is low compared to developed countries • Estimated 12 car owners per 1000 people. low purchase.• Despite growth.

5 lakhs Under 8 lakhs C2 D1 D2 Sedan Premium sedan Luxuty sedan 8 to 9.Tata indica) Under 3.Segmentation of passenger vehicle Segment Description Price range A B1 Entry level hatchback (ex.5 lakhs 3.5 lakhs Under 15 lakhs Under 25 lakhs .Alto . maruti 800) Hatchback (ex .5 to 6 lakhs B2 C1 Hatchback Sedan 6 to 7.


two cylinder 624 cc . 1 lakh goal by omitting many features like power steering. Tata partnered with different suppliers including GKN Driveline India (driveshaft) The development of the NANO’s engine i.“world’s smallest and cheapest car” and most fuel-efficient which would be known as “ people’s car” at Rs. power window. ac etc.THE NANO • 2007 Geneva auto show . Whereas The Nano CX and The Nano LX offered more luxurious car at higher price .was left to Tata motors • • • 3 models : The Nano. The Nano CX and The Nano LX The Nano met Rest.e. • To reduce the costs associated with parts and manufacturing without compromising quality. 1 lakh price.

of which customers would be selected via lottery • Booking options :  Online booking  Tata Dealership  Offline booking at SBI branches and various Tata stores • Deposit payment must .Distribution Channels • A 17-day booking window.

Positioning of Nano .

2009 • In April 2009.000 units per year • Open Sales through Tata Dealerships began from a single state in 2009 .000 were selected using lottery system • Half bookings were for Nano LX.00. 1.000 Nanos.50. 30% for Nano CX and 20% for the basic Nano • The new Sanand plant provided a capacity of 2. out of the initial bookings of 2.03.

2010 onwards. sales of Nano plummeted to a mere 509 units • This was due to two causes: – Rising safety issues – Rising raw material costs .000 units per month in July 2010 • In November 2010.. when the car sales grew 22%. • Monthly sales grew peaking at 9.


784 units . the sales rebounded to 5. TML issued a statement that the fires were a result of “foreign electrical equipment” and not due to any safety issues in car • TML took measures and improved the electrical system of the car • TML also increased the 18 months warranty to 4 years or 60.000 Kms • By December.Fire fighting • Tata motors conducted an investigation.