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TATA NANO- CASE STUDY
ABSTRACT
Tata motors limited is Indian multinational an automotive manufacturing company,

headquartered in the city of Mumbai, India which is part of Tata group. The company produces
passenger cars, trucks, vans, coaches, buses, luxury cars, sports cars, construction equipment.
Formerly known as Tata engineering and locomotive company (telco), the company was founded
in 1945 as a manufacturer of locomotives. The company manufactured its first commercial vehicle
in 1954 in a collaboration with Daimler Benz ag, which ended in 1969. Tata motors entered the
passenger vehicle market in 1988 with the launch of the Tata mobile followed by the Tata sierra
in 1991, becoming the first Indian manufacturer to achieve the capability of developing a
competitive indigenous automobile. In 1998, Tata launched the first fully indigenous Indian
passenger car, the indicia, and in 2008 launched the Tata nano, the world’s most affordable car.
Tata motors acquired the south Korean truck manufacturer Daewoo commercial vehicles company
in 2004. Tata motors has been the parent company of jaguar land rover since the company
established it for the acquisition of jaguar cars and land rover from ford in 2008.
INTRODUCTION
This case tracks Tata nano, one of the favorite projects of rattan Tata, chairman of the $100 billion
Tata group of India. Conceptualized initially as the people’s car by Tata motors, it was unveiled
in the prestigious Delhi auto expo in 2008. It was the first ₹100,000 car globally, showcasing
India’s design, manufacturing and technological ability. It was launched in 2009 to upgrade the
aspirational middleclass two-wheeler customers to a safer transportation option of a car. The
immediate response from the media and the market was tremendous, and the company collected
advance deposits from interested customers. Amid some media reports of engine fires, the initial
sales spike ebbed quite rapidly.
MANAGERIAL INFERENCES THAT MAY BE DERIVED
In essence, the company was trying to make a car for the average family man who was a two-
wheeler buyer. They were trying to solve their functional needs of a safer and more comfortable
ride with an aspirational product category, which was beyond the customer’s financial capability.
Thus, the company wanted to offer something aspirational that was affordable at the same time.
Therefore, the affordable, aspirational product was an inherent contradiction in Tata Nano’s core
value proposition to the target market.
THE PROBLEM OF THE TARGET MARKET
Tata group was in passenger cars and commercial vehicles for many decades. It had a good
understanding of the transportation needs of the market. However, they had no direct experience
of their initial target segment of two-wheeler customers. The basic assumption was that tata nano
solved their functional need of safe transportation and aspiration of becoming a car owner, which
was possibly correct. However, in practice, nano was functionally a transportation solution, but
the car for this customer segment had to meet their aspirational requirement. The idea of a cheap
car doused the aspirational element of the nano appeal completely. What is important to note that,
for this customer, even ₹100,000 was still a very big price tag, which they could not afford to meet
only their safe transportation need.
THE PROBLEM WITH THE PRODUCT
The product brief would have given the details of the target consumer and their expectation based
on their current product usage, along with a target price. Since this was meant to be a low priced
product, the development team would have resorted to value engineering and focused on the
product’s core benefits, delivering the basic product and some elements of the expected product.
Consequently, tata nano initially lacked the features available in the augmented and potential
product, which their intended consumers expected. Hence, the price was still quite high for the
potential consumer compared to what they were using (two-wheeler); but the product was far lesser
than what were their current references available in the market (four-wheelers). Thus, an
expectation mismatch and tata nano possibly did not appeal to a sufficient number of two-wheeler
owners.
TATA NANO SOLUTION
There are lots of talks about Tata Nano nowadays. Millions of people are waiting for the launch of
Tata Nano. With sufficient features this car provides basic features like 4 seats and good mileage.
The Tata
Nano is 3.1m long, 1.5m wide and 1.6m high vehicle which makes it one of the shortest cars in
India. The Tata Nano is not only famous in India but the whole world is looking forward to Tata
Nano. I am driving a Maruti 800 and some other small cars of Maruti since last six years. To be
honest I cant afford a car costlier than Maruti 800. So I would like to have a car which has cost
that fits in my pocket and which has sufficient features, good mileage, low price and nothing else.
And Tata Nano has exactly what I want in a car, low price, good mileage. It has an engine of 623cc
which is probably the least powerful engine in India but what performance this car will deliver
will be interesting to see.
SWOT ANALYSIS ON TATA NANO
NANO which is a brain child of Ratan Tata raised hope for a lot of Middle class families by giving
them the status of owning a car. Expectations were increasing amongst the customers regarding
the product features and its efficiency. Competitors were eagerly waiting for its arrival to find
“what’s inside NANO?”. The only factor the customer knew in advance was its price tag of 1 lac
as conveyed by Ratan Tata. But why was it not a big hit and why is it still lagging to grab the
market in spite of its good and convincing features? We probed into the health of Tata Nano as a
brand and as a product and carried out a SWOT analysis on NANO
TATA NANO STRENGTHS
• Tata Nano is available at very affordable prize.

• Easy to drive in traffic conditions.
• Innovations engineering of Tata Nano provider better facilities compared to segment
cars.
• Low maintenance and handling cost of Tata Nano.
• Good fuel efficiency goes well with Indian Audiences.
• When it was introduced it created a huge buzz in the gobal automobile.
• Excellent advertising of the Tata Nano car across TVCs, print media, online ads etc.
TATA NANO WEAKNESSES
• Perceived as a cheap product which repels the aspirational customers.

• Setting up of production plants in WB caused a lot of tension.
• Limiter international presence of Tata Nano
TATA NANO OPPORTUNITIES
• Tata Nano can capitalize on the fact that it is the most affordable car and acquire new
customers.
• Increasing per capita income and purchasing capability of potential customer base.
• Promoting CNG model at the earliest and attract the public passenger car segment.
• Increase international market presence especially Europe too boost Tata Nano’s
business.
• Augmenting the distribution and service network in various countries.
TATA NANO THREATS
• Increasing fuel costs.

• Competition from other bog automobile giants can affect Tata Nano business.
• Competitive products offering same level features at a lesser price.
• Product innovations and frugal engineering by competitors.
• Customer perception of Tata Nano as a cheap car can lead to loss of sales.
TATA NANO COMPETITORS
• Maruthi Alto
• Hyundai i10
• Maruti 800
CONCLUSION
Overall, the future of the nano brand was in serious question. Neither the product met the
aspirational needs of the target consumers nor the brand had a clear reference point to establish its
value proposition. It is difficult to give up a project that had seen a significant investment in
resources, and peoples hard work and emotions were involved. But, given the circumstances, that
is possibly the best way forward for tata nano. It was made affordable for the lower middle class
people. Tata Nano was one of the world’s cheapest car. The car was turning heads in the beginning
but later didn’t prefer this car. It had to face a lot of competition and it offered much less than it
competitors for the same price.

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TATA NANO- CASE STUDY

Tata motors limited is Indian multinational an automotive manufacturing company,

MANAGERIAL INFERENCES THAT MAY BE DERIVED

THE PROBLEM OF THE TARGET MARKET

THE PROBLEM WITH THE PRODUCT

TATA NANO SOLUTION

TATA NANO STRENGTHS

• Tata Nano is available at very affordable prize.

TATA NANO WEAKNESSES

• Perceived as a cheap product which repels the aspirational customers.

TATA NANO THREATS

• Increasing fuel costs.

TATA NANO COMPETITORS

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