THE TATA NANO: THE PEOPLE’S CAR

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.
 COMPANY HISTORY

• TATA engineering and Locomotive Co. Ltd, a train

manufacturer established in1945.

• 1954: Company launched its first automobile

• 1954-1969: Collaborated with Daimler Benz to

produce TATA Mercedes-Benz trucks

• 1990: TATA Sierra, India’s First SUV.

• 1998: TATA Indica

• 2005: TATA Ace, Mini Truck

• TATA group has 96 companies and has

employed 6,50,000 people on 6 continents.

• Manufacturing Plants: Jameshdpur, Pune &

Lucknow
 TARGET MARKET
• The low-cost car is clearly intended for the
masses.
• For the family of four that would
otherwise
ride on a scooter,
• Its also attracts the small cars buyers like
Maruti 800, bike riders etc.
 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).
 Competencies of Tata Nano
• 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 worlds 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
 EXTERNAL ENVIRONMENTAL ANALYSIS

External analysis
• Customer analysis
• Competitor analysis
• Market analysis
• Environmental analysis
 CUSTOMER ANALYSIS
• Customer segment: Middle income Indian
family, College going students
• Competitive advantage: Low cost, High
efficiency, Attractive design.
 COMPETITOR ANALYSIS
Cost structure
• TATA sought the bulk of its cost savings in a
streamlined modular design in which many
components served more than one function
Culture
• Cost control: producing mass items and shipping
them in kits.
• Customer Centric: Middle income Indian family of
four who would want to avoid rain, dust etc.
 STRENGTH AND WEAKNESS

STRENGTHS
• Brand name: TATA
• Low cost: 1 Lakh INR
• Affordable to many
• Safety and Comfort
• Efficient utilization of labor and raw materials
• Highly efficient: 22km/ltr and 26km/ltr
• Assembling procedure simplified
WEAKNESS
• TATA’s overall sales-satisfaction index ranked the
company below the industry average.
• Suspicion of meeting safety and emission
standards because of low cost
• Not Sustainable whether from an environmental
point of view or in terms of congestion
• Absence of AC, Power steering, Power windows
etc.
 OPPORTUNITIES AND THREATS
OPPORTUNITIES
• Car segments
• Used cars
• Two wheeler segments
THREATS
• Political and legal constraints
• Competitors bringing down their price
• Government may increase taxes in metros
• Rising cost of raw material
 ENVIRONMENTAL ANALYSIS
Political or governmental
• Rickshaw drivers filing petition for allowing
them to drive Nano with their three wheeler
permits.
• Manufacturing plant in Singur protested by
area farmers because of no compensation
given to them.
• Economical
• Boom in the banking and financial
sector
• Competitive advantage
• Mass Selling and production
• Employment
• Energy security issue
• Social
• Living standard up gradation
• Increased safety
• 1 million cars per year
• Inadequate infrastructure
• Traffic congestion
• Parking problem
• Technological
• Automobile revolution
• Mass production
• Safety will be compromised
• R&D for low cost editions
• Environmental
• Pollution
• Global warming
• Petroleum scarcity
• Non-biodegradable waste
• Legal
• Fuel price hikes is the most important
challenge for Nano.
• Increase in material cost like steel
and tires.
 MICHAEL PORTERS FIVE FORCE ANALYSIS

• Threat of New Entrants

• Rivalry Among existing Firms
• Threat of substitutes
• Threat of bargaining power of buyer
• Threat of bargaining power of supplier
 Future of Nano (conclusion)
• 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 conclusion can be drawn as a future
car not only of Indian but also if exported could be to the
world.
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