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Positioning of TATA Nano

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Narendra Patankar
Narendra Patankar

Tata launched the Nano car in 2009 with the goal of providing an "ultra low-cost" vehicle priced at Rs. 1 lakh. There were two options considered for positioning the Nano - as a family transport vehicle or for specific usage situations. The automotive industry in India has high growth rates but low per capita vehicle ownership compared to developed countries. The Nano faced competition from other small and low-cost vehicles. Initial bookings were strong but sales declined in late 2010 due to safety issues and rising material costs, which Tata addressed through improvements and an extended warranty.

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Positioning the TATA Nano SECTION B GROUP 4: NARENDRASINGH ANURAG B SETHU AKSHAY ANURAJAN AVADHESH JAYESH
Case Overview • In 2009, launch of Nano from TML • Problem in front of Ratan Tata - How best to position his new brand – ultra low cost cars • Option One – Family transport • Option Two – Usage situation • Which option to choose ?
The TATA Group : Company History • Founded by Jamsetji Tata in 1868 as trading company • First steel mill, power utility, luxury hotel and international airline • By 2011, 98 companies over 7 sectors. • Company seen as Inspired trust & a strong commitment to ethics • By TATA Code of Conduct, TATA promised to improve the quality of life and Nano is a prime example.
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
• Despite growth, per capita ownership of automobile is low compared to developed countries • Estimated 12 car owners per 1000 people, versus 765 per 1000 in US and 426 per 1000 in UK • Two wheelers dominate Indian market due to fuel efficiency , low purchase, and low maintenance cost • About 76 % of all vehicle sales in India are of 2 wheelers and remaining are passenger vehicle
Segmentation of passenger vehicle Segment Description Price range A Entry level hatchback (ex- Alto , maruti 800) Under 3.5 lakhs B1 Hatchback (ex - Tata indica) 3.5 to 6 lakhs B2 Hatchback 6 to 7.5 lakhs C1 Sedan Under 8 lakhs C2 Sedan 8 to 9.5 lakhs D1 Premium sedan Under 15 lakhs D2 Luxuty sedan Under 25 lakhs
THE NANO • 2007 Geneva auto show - “world’s smallest and cheapest car” and most fuel-efficient which would be known as “ people’s car” at Rs. 1 lakh price. • • 3 models : The Nano, The Nano CX and The Nano LX The development of the NANO’s engine i.e. two cylinder 624 cc ,was left to Tata motors • • To reduce the costs associated with parts and manufacturing without compromising quality, Tata partnered with different suppliers including GKN Driveline India (driveshaft) The Nano met Rest. 1 lakh goal by omitting many features like power steering, power window, ac etc. Whereas The Nano CX and The Nano LX offered more luxurious car at higher price
• First year, TML planned to produce 3,50,000 Nanos at a plant being built at Singur, WB. • Conflict at Singur • In September 2008, shift to Sanand, Gujarat – with delay in production of 18 to 24 months. • By not postponing the much anticipated launch, TML started to produce 50,000 Nanos temporarily at Pantnagar plant, Uttarakhand.
Competition • Maruti 800 : most affordable car in India until the release of Nano • Current major competitor : Maruti Alto • Future competition : ULC cars from Hyundai, Maruti, Habib Motors, Renault Nissan, Toyota and Ford • Two wheeler segment – low price, fuel efficiency, easy maneuverability, low maintenance cost compared to Nano • Consumer behavior – more value for money slightly more cost, but better engine, safety features and more space – Wagon R, Santro Xing, Chevrolet Beat, Alto etc
Distribution Channels • A 17-day booking window, 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
• Dealerships 214 dealerships across 28 states Dealer margins cut down from 4-10 % to 2-3% 1% discount if dealer paid cash upfront • Toyed with the idea of using entrepreneurial engineers as local retailers • Idea scrapped due to potential warranty and liability issues.
Positioning of Nano
2009 • In April 2009, out of the initial bookings of 2,03,000 Nanos, 1,00,000 were selected using lottery system • Half bookings were for Nano LX, 30% for Nano CX and 20% for the basic Nano • The new Sanand plant provided a capacity of 2,50,000 units per year • Open Sales through Tata Dealerships began from a single state in 2009
2010 onwards.. • Monthly sales grew peaking at 9,000 units per month in July 2010 • In November 2010, when the car sales grew 22%, sales of Nano plummeted to a mere 509 units • This was due to two causes: – Rising safety issues – Rising raw material costs
Positioning of TATA Nano
Positioning of TATA Nano
Positioning of TATA Nano
Fire fighting • Tata motors conducted an investigation. 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, the sales rebounded to 5,784 units
Positioning of TATA Nano
Positioning of TATA Nano
Positioning of TATA Nano
Positioning of TATA Nano
Positioning of TATA Nano
Positioning of TATA Nano
Positioning of TATA Nano
Positioning of TATA Nano
Positioning of TATA Nano
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More Related Content

Positioning of TATA Nano

  • 1. Positioning the TATA Nano SECTION B GROUP 4: NARENDRASINGH ANURAG B SETHU AKSHAY ANURAJAN AVADHESH JAYESH
  • 2. Case Overview • In 2009, launch of Nano from TML • Problem in front of Ratan Tata - How best to position his new brand – ultra low cost cars • Option One – Family transport • Option Two – Usage situation • Which option to choose ?
  • 3. The TATA Group : Company History • Founded by Jamsetji Tata in 1868 as trading company • First steel mill, power utility, luxury hotel and international airline • By 2011, 98 companies over 7 sectors. • Company seen as Inspired trust & a strong commitment to ethics • By TATA Code of Conduct, TATA promised to improve the quality of life and Nano is a prime example.
  • 4. 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
  • 5. • Despite growth, per capita ownership of automobile is low compared to developed countries • Estimated 12 car owners per 1000 people, versus 765 per 1000 in US and 426 per 1000 in UK • Two wheelers dominate Indian market due to fuel efficiency , low purchase, and low maintenance cost • About 76 % of all vehicle sales in India are of 2 wheelers and remaining are passenger vehicle
  • 6. Segmentation of passenger vehicle Segment Description Price range A Entry level hatchback (ex- Alto , maruti 800) Under 3.5 lakhs B1 Hatchback (ex - Tata indica) 3.5 to 6 lakhs B2 Hatchback 6 to 7.5 lakhs C1 Sedan Under 8 lakhs C2 Sedan 8 to 9.5 lakhs D1 Premium sedan Under 15 lakhs D2 Luxuty sedan Under 25 lakhs
  • 7. THE NANO • 2007 Geneva auto show - “world’s smallest and cheapest car” and most fuel-efficient which would be known as “ people’s car” at Rs. 1 lakh price. • • 3 models : The Nano, The Nano CX and The Nano LX The development of the NANO’s engine i.e. two cylinder 624 cc ,was left to Tata motors • • To reduce the costs associated with parts and manufacturing without compromising quality, Tata partnered with different suppliers including GKN Driveline India (driveshaft) The Nano met Rest. 1 lakh goal by omitting many features like power steering, power window, ac etc. Whereas The Nano CX and The Nano LX offered more luxurious car at higher price
  • 8. • First year, TML planned to produce 3,50,000 Nanos at a plant being built at Singur, WB. • Conflict at Singur • In September 2008, shift to Sanand, Gujarat – with delay in production of 18 to 24 months. • By not postponing the much anticipated launch, TML started to produce 50,000 Nanos temporarily at Pantnagar plant, Uttarakhand.
  • 9. Competition • Maruti 800 : most affordable car in India until the release of Nano • Current major competitor : Maruti Alto • Future competition : ULC cars from Hyundai, Maruti, Habib Motors, Renault Nissan, Toyota and Ford • Two wheeler segment – low price, fuel efficiency, easy maneuverability, low maintenance cost compared to Nano • Consumer behavior – more value for money slightly more cost, but better engine, safety features and more space – Wagon R, Santro Xing, Chevrolet Beat, Alto etc
  • 10. Distribution Channels • A 17-day booking window, 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
  • 11. • Dealerships 214 dealerships across 28 states Dealer margins cut down from 4-10 % to 2-3% 1% discount if dealer paid cash upfront • Toyed with the idea of using entrepreneurial engineers as local retailers • Idea scrapped due to potential warranty and liability issues.
  • 13. 2009 • In April 2009, out of the initial bookings of 2,03,000 Nanos, 1,00,000 were selected using lottery system • Half bookings were for Nano LX, 30% for Nano CX and 20% for the basic Nano • The new Sanand plant provided a capacity of 2,50,000 units per year • Open Sales through Tata Dealerships began from a single state in 2009
  • 14. 2010 onwards.. • Monthly sales grew peaking at 9,000 units per month in July 2010 • In November 2010, when the car sales grew 22%, sales of Nano plummeted to a mere 509 units • This was due to two causes: – Rising safety issues – Rising raw material costs
  • 18. Fire fighting • Tata motors conducted an investigation. 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, the sales rebounded to 5,784 units