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Tata nano


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Tata nano

  1. 1. A STUDY ON“Consumer perception and future potential for TATA NANO.” Submitted in partial fulfillment for the award of the degree Master of Business Administration Chhattisgarh Swami Vivekanand Technical University, Bhilai Submitted by, Richa Vohra MBA – Semester II (Session 2008-2010) Shri Shankaracharya Institute of Management and Technology Junwani, Bhilai (C.G.) - 490020
  2. 2. CERTIFICATEThis is to certify that the project “A study on consumerperception and future potential for TATA NANO”submitted to Shri Shankaracharya Institute ofManagement & Technology, Bhilai in partial fulfillmentof the requirement for the award of Master of BusinessAdministration (MBA) is a bona fide work carried out byRicha Vohra, a student of MBA II Sem, under mysupervision and guidance. The project was carried during1.06.09 to 10.07.09 in Sairam Automobiles & ServicesPvt. Ltd. Date: - Richa Vohra Mr. Narendra Sahu M.B.A (2008-2010) SM. (Sairam Automobiles & services Pvt. Ltd.)
  3. 3. DECLARATIONI, Richa Vohra a student of MBA II Semester 2008, atShri Shankaracharya Institute of Management &Technology hereby declare that this Project Report underthe title “A Study on Consumer perception & futurepotential for TATA NANO” is the record of my originalwork under the guidance of MR. NARENDRA SAHU.This report has never been submitted to anywhere else foraward of any degree/diploma.Place: Bhilai Richa VohraDate: MBA – Semester II [ii]
  4. 4. ACKNOWLEDGEMENT It is a proud privilege on my part to express my sincereand humble gratitude to all those people who have helpedme directly or indirectly in the completion of this project. I thank venerated Mr.NARENDRA SAHU (C.M),who gave me an opportunity to undergo my project inSairam Automobiles & Services and extend their valuablehelp and guidance throughout my project. I pay sincere thanks who spent his valuable time andknowledge and gave me wholehearted support andencouragement in carrying out this project. I thank all those executives and non executives ofSairam Automobiles & Services who spent their valuabletime in interacting and giving their personal time ininterviewing them. Finally, I thank all the team members for interactingand sparing their valuable time with me whenever possible . Richa Vohra M.B.A (2nd year) [iii]
  5. 5. [iv]
  6. 6. TABLE OF CONTENTS PAGE NO Acknowledgement DECLARATION CERTIFICATE TABLE OF CONTENTS EXECUTIVE SUMMARY1. INTRODUCTION TO THE COMPANY 1.1 Various product of TATA MOTORS 1.2 Shareholding patterns of TATA MOTORS 1.3 SWOT analysis of the company2. INTRODUCTION TO THE TATA NANO 2.1 Financial projection 2.2 Technical overview 2.3 Vehicle summary 2.4 Supplies of TATA NANO 2.5 Controversies involved [v]
  8. 8. EXECUTIVE SUMMARYTata Nano is the cheapest car in the world. It is sold in homecountry India around Rs 1 lakh i.e. approximately USD 2000. It ismanufactured by Tata Motor Limited, the largest to automobilecompany in India. It’s Chairman, Mr Ratan Tata envisions that TataNano become a “People’s car” which is affordable by almosteverybody. Tata Nano was first launched in India on 1 st April 2009and expected to be in Indian market by July 2009. Since launching,it has created a huge buzz all over India. Within the first two days oflunching, it has received 5500 booking. The figures keep increasingevery day since the launching.What makes Tata Nano so cheap? Basically, by making thingssmaller, lighter, do away with superficial parts and change thematerials wherever possible without compromising the safety andenvironmental compliance. It is said that Tata Nano has bettermileage than Toyota Prius and same gas emission as a scooterTata Nano will be imported to Malaysia by Tata Industries in parts.It will be assembled in its two factories i.e in Shah Alam, Selangorand Pasir Gudang, Johor Bahru. There are four distribution centresin Peninsular Malaysia i.e. in Kuala Lumpur, Penang, Johor Bahruand Kuantan. All Tata Nano cars will be distributed through thesedistribution centres only. Order can. be made vide these distributioncentres or its web site.There are three types of Tata Nano car available i.e. Tata Nano, TataNano CX and Tata Nano LX. However, due to hot weather inMalaysia, only Nano CX will be brought to Malaysia and will besold here. The selling price of Nano CX in Malaysia is RM 13,704per unit. It is estimated that gross profit for the first year wouldyield xxx, second year xxx and third year xxx Estimated monthlyinstalment payment is xxx for seven years period. With this price,the target market is very wide which includes those with incomeRM 2000 per month, students female workers and scooters’ riders [vii]
  9. 9. -. . [viii]
  10. 10. INTRODUCTION TO THE COMPANY Tata Motors Limited, formerly known as TELCO (TATAENGINEERING AND LOCOMOTIVE COMPANY), is a multinational corporationheadquartered in Mumbai, India. It is Indias largest passenger automobile andcorporation commercial vehicle manufacturing company. Part of the Tata Group, andone of the worlds largest manufacturers of commercial vehicles. The OICA ranked it asthe worlds 20th largest automaker, based on figures for 2006Tata Motors was established in 1945, when the company began manufacturinglocomotives. The company manufactured its first commercial vehicle in 1954 in acollaboration with Daimler Benz AG, which ended in 1969 Tata Motors was listed onthe NYSE in 2004, and in 2005 it was- ranked among the top 10 corporations in Indiawith an annual revenue exceeding INR 320 billion. In 2004, it bought Daewoos truckmanufacturing unit, now known as Tata Daewoo Commercial Vehicle, in South Korea.It also, acquired a 21% stake in Hispano Carrocera SA giving it controlling rights in thecompany. Tata Motors launched the Tata Nano, noted for its Rs100,000 price-tag, inJanuary 2008.In March 2008, it finalized a deal with Ford Motor Company to acquire their BritishJaguar Land Rover (JLR) business, which also includes the Rover, Daimler andLanchester brand names. The purchase was completed on 2 June 2008 Tata Motors hasits manufacturing base in Jamshedpur, Pantnagar, Lucknow, Ahmedabad andPune.1. History [1]
  11. 11. Tata Motors launches its first truck in collaboration with Mercedes-Benz.Tata Motors isa part of the Tata and Sons Group, founded by Jamshedji Nussarwanji Tata and J Baker.The company was established in 1945 as a locomotive manufacturing unit and laterexpanded its operations to commercial vehicle sector in 1954 after forming a jointventure with Daimler-Benz AG of Germany.Various Products of TATA Motors[1] Passenger cars and utility vehiclesTata Indigo SW• Tata Sierra• Tata Estate• Tata Sumo/ Spacio• Tata Safari• Tata Indica [2]
  12. 12. • Tata Indigo• Tata Indigo Marina• Tata Winger• Tata Nano (3RD March 2009)• Tata Xenon XT• Tata Xover (2009)[2] Concept vehiclesTata Cliffrider• 2000 Aria Roadster• 2001 Aria Coupe• 2002 Tata Indica• 2002 Tata Indiva• 2004 Tata Indigo Advent• 2005 Tata Xover• 2006 Tata Cliffrider• 2007 Tata Elegante• 2009 Tata Prima[3] Commercial vehiclesTata 1616 Starbus [3]
  13. 13. Tata Marcopolo Buses in the Delhi BRT .Tata Star Bus in Nagpur, Maharashtra. Tata Low Floor Buses are also used byadministrations in Delhi, Mumbai, Pune, Udaipur and Indore• Tata Ace• Tata TL/ Telcoline /207 DI Pickup Truck• Tata 407 Ex and Ex2• Tata 709 Ex• Tata 809 Ex and Ex2• Tata 909 Ex and Ex2• Tata 1109 (Intermediate truck)• Tata 1510/1512 (Medium bus)• Tata 1610/1616 (Heavy bus)• Tata 1613/1615 (Medium truck)• Tata 2515/2516 (Medium truck)• Tata Starbus (Medium Bus)• Tata Globus (Low Floor Bus)• Tata Marcopolo Bus (Low Floor Bus)• Tata 3015 (Heavy truck)• Tata 3118 (Heavy truck) (8X2)• Tata 3516 (Heavy truck)• Tata 4923 (Ultra-Heavy truck) (6X4)• Tata Novus (Heavy truck designed by Tata Daewoo)[4] Military vehicles [4]
  14. 14. • Tata LSV (Light Specialist Vehicle)• Tata 2 Stretcher Ambulance• Tata 407 Troop Carrier, available in hard top, soft top, 4x4, and 4x2 versions• Tata LPTA 713 TC (4x4)• Tata LPT 709 E• Tata SD 1015 TC (4x4)• Tata LPTA 1615 TC (4x4)• Tata LPTA 1621 TC (6x6)• Tata LPTA 1615 T [5]
  15. 15. Introduction to the TATANANOThe Tata Nano is a proposed city car debuted by Indias Tata Motors at the 9thannual Auto Expo on January 10, 2008 at Pragati Maidan in New Delhi, India.Called the people’s car in Tatas promotional material, it was projected to be theleast expensive production car in the world. The standard version of the Nano isprojected to sell for Rs. 100,000 (approximately US $2500, GBP 1277, or € 1700) , notincluding fees or delivery. Newsweek identifies the Nano as a part of a "new breedof 21st-century cars" that embody "a contrarian philosophy of smaller, lighter,cheaper" and portend a new era in inexpensive personal transportation —and potentially, "global gridlock". The Wall Street Journal confirms a global trendtoward small cars, led by the Nano.The prefix "Nano" derives from the Greek root nanos, meaning dwarf — as withnanometer. "Nano" also means "small" in Gujarati, the native language of the Tatafamily, founders of the Tata Group.History and conceptionThe project to create a 1 lakh (1 lakh = 100000 rupees) car began in 2003, under the Chairmanof Tata Motors, Ratan Tata. The strategy behind the project was the awareness of the numberof Indian families who had two wheeled transport, but couldnt afford a four wheel car, andwas based on the companys success in producing the low cost 4 wheeled Ace truck in May2005.The Nano was unveiled at the 2008 New Delhi Auto Expo.Industry convention was that a reliable car couldnt be made at such a low price, soinitial media speculation was that the car would be a simple four-wheeled autorickshaw. However, The Times of India reported that the vehicle is "a properlydesigned and built car". The Chairman is reported to have said, "It is not a car withplastic curtains or no roof — its a real car." During development the company [6]
  16. 16. reinvented and minimized the manufacturing process, brought in innovative productdesign, and asked component manufacturers to lookat current work and design approaches in a different perspective to produce logical and simplesolutions. The car was designed at Italys Institute of Development in Automotive Engineering,with Ratan Tata ordering certain changes during the process, such as reducing the number ofwindscreen wipers from two to one.Financial projection: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 rapidlyrising material prices. Tata Motors has been able to cut down the cost of the car bymaking things smaller and lighter, doing away with superficial parts and changingmaterial wherever possible. Tata Motors company had received lakhs of enquiriesthrough the internet for the Nano.Tata Motors intends to open bookings for the car three months from now. Tata Motorsplans to produce 2,50,000 Tata Nano Cars in the first phase and add 1,00,000 in thesecond phase, taking the total production capacity to 3,50,000 cars probably by the endthe next financial yearAs of August, 2008 material costs have risen from 13% to 23% over the car’sdevelopment, and Tata now faces the choice of introducing the car with an artificiallylow introductory price, raising the price of the car, or foregoing profit on the car — thelatter an unlikely proposition., while an increased price on the Nano will likely decreasedemandTechnical overview:DesignThe People’s Car, designed with a family in mind, has a roomy passenger compartmentwith generous leg space and head room. It can comfortably seat fourpersons. Four doors with high seating position make ingress and egress [7]
  17. 17. easy. Yet with a length of 3.1 metres, width of 1.5 metres and height of 1.6 metres, withadequate ground clearance, it can effortlessly manoeuvre on busy roads in cities as wellas in rural areas. Its mono-volume design, with wheels at the corners and the powertrainat the rear, enables it to uniquely combine both space and manoeuvrability, which willset a new benchmark among small carEngineUnlike other low cost Indian cars, this one is going to have a variomatic gear system.Instead of manual gear box in conventional cars it is coming up as gear less or ratherwith an automatic gear transmission. This helps to improve the efficiency & mileage bymagnifying the torque output.As in international markets, the compact car from Tata will have back mounted engine,pushing the luggage space to the front. Making the engine closer to the fuel tank hasanother advantage of increased fuel efficiency. Rear mounted engine also help inreducing the power loss during transmission. The car will have front disk and rear drumbrakes. The company claims mileage of 22 kmpl in city and 26 kmpl on highway.Fuel Efficiency [8]
  18. 18. The People’s Car has a rear-wheel drive, all-aluminium, two-cylinder, 623 cc, 33 PS,multi point fuel injection petrol engine. This is the first time that a two-cylinder gasolineengine is being used in a car with single balancer shaft. The lean design strategy hashelped minimise weight, which helps maximise performance per unit of energyconsumed and delivers high fuel efficiency. Performance is controlled by a speciallydesigned electronic engine management system.Safety & ComfortBy adhering to the fact that less weight requires less power, the 1 lakh car is made oflight weighing steel. This has made the Tatas come up with a cheap alternative with outcompromising on safety and performance. The base model will feature glass windowsthat can be cranked up. The tail lights are expected to appear like as in Tata Indica.Higher versions will have the comforts of power steering, power windows, air-conditioning and much more. With an all sheet-metal body, it has a strong passengercompartment, with safety features such as crumple zones, intrusion-resistant doors, seatbelts, strong seats and anchorages, and the rear tailgate glass bonded to the body.Tubeless tyres further enhance safety. Itexceeds current regulatory requirements with a strong passenger compartment, crumplezones, intrusion resistant doors, seat belts, strong seats and anchorageControversies InvolvedControversies also arose about Tatas planned manufacturing unit for the car in Singur,West Bengal, where the state government of West Bengal has allocated 997 [9]
  19. 19. acres (4.03km²) to Tata Motors. The construction of the carfactory on that tract of land will require fertile agricultural land and the expropriationand eviction of ca. 15,000 peasants and agricultural workers. The affected farmers fearthey will receive inadequate or no compensation and therefore lose their livelihoods.Activists near Kolkata, where Tatas manufacturing unit is located, started burning thecar in effigy. In New Delhi, a group of six women protested wearing T-shirts bearingslogans that said, "The Rs 1 lakh car has Singur peoples blood on it." The TrinamoolCongress alleged that Tata motors usurped the agrarian land for the construction site andhas threatened to stall the manufacture ofthe car. The 11 cases were dismissed.The Nano is alleged to have severely affected the used car market in India, as manyIndians opt to wait for the Nanos release rather than buying used cars, such as theMaruti 800 (a rebadged Suzuki Alto), which is considered as the Nanos nearestcompetitor. Sales of new Maruti 800s have dropped by 20%, and used ones by 30%following the unveiling of the Nano.It will be a tragedy if such a mega investment and employee generating project by oneof India’s most respected company is lost to West Bengal on account of a failure ofcommunication among its stakeholders. It’s time that we as a nation begin to think ofsuch projects as national projects and not become captive to immediate impulses. Therecannot be and must never be any contradiction between industrialisation and welfare offarmers.In a democracy, the sensitivity of all stakeholders have to be addressed and in thecontext of land acquisition controversies, the new law of land acquisition andrehabilitation, proposed by the UPA government, is the way forward. If the Tatawithdraws from the Nano project in West Bengal, investors’ sentiments will be hurt, andthe only way for the company to move forward is for all concerned to ensure a political [10]
  20. 20. atmosphere conducive for investment. The Nano has 34 patents on the car’s designitself, which is a cause for national celebration as it represents a major technological andmanufacturing feat in the automotive sector. All projects of technological excellence andoriginality that give India a special place in innovation and unique competitiveadvantage, should be treated as national projects. The state government should ensurethe farmers are justly compensated in terms of price for their land and employeeopportunities in the car project through suitable policy initiative. Democraticgovernment is all about dialogue and moderation, and we hope that the West Bengalgovernment will initiate purposive dialogue with all concerned. After all, his unfortunatecontroversy must be resolved to the satisfaction of allstakeholders through dialogue alone.Latest At Singur:In Tata Motors’ long term interests Singur has become a flash point and a hot bed forpolitical activity. The average Indian will however be synonymous with Singur as thechief production facility of the World’s cheapest car. The much talked about 1 lakhpeople’s car or the Nano. This statement is the first clear indication by Ratan Tata thathe isn’t interested in dealing with the violent politics of Singur. Ratan Tata is not thetype of man who uses the media to play around which means that today’s statement is aforecast of what will happen unless things change at ground zero in Singur. Forinvestors and shareholders of Tata Motors, this is a major development which could goeither way for them and simultaneously their investments. If Tata Motors decide tomove out then almost 2 years worth of work will have to be re-started somewhere else.Despite Tata’s confidence that they are capable of rolling out the Nano by October,future production will be hampered if they are forced to shift their project elsewhere.Singur has become a political issue between the government and the opposition over thegovernment’s ‘capture’ of Farmer agricultural land. While the opposition alleges that [11]
  21. 21. some land has been forcefully acquired, while for some adequate compensation has notbeen paid; theimportant fact remains that violent methods are being used to deal with the situation.Farmers protesting the Tata plant have resorted to beating up the staff of the Singurplant .Serious bodily damage has been inflicted on the staff and family members of TataMotors at Singur. This has been the main reason why Tata might very well pull out ofSingur. For the state housing the Nano project, things are serious for West Bengal. TheNano project at Singur has put in around 1500 crores and will pump in even more onceserious production begins. For a state that is in need of heavy investment, a fiasco likethis will set a dangerous precedent and deter future investments by corporates in Indiaand the World. Tata Motors if booted out of Singur might make their way to the state ofUttar Pradesh. Even Uttaranchal and Arunachal Pradesh with their lenient tax structurescould be unlikely gainers. There are also the special economic zones of Gujarat andKarnataka that hold promise. If Tata decide to move, investors can take heart from thefact that despite delayed production and eventually sales, the Nano will still find takers. [12]
  22. 22. [13]
  23. 23. RESEARCH METHODOLOGYObjectives• To know the present Consumer Perception about TATA NANO.• Finding future potential for NANO.Data collectionThere are two types of data collection method use in my project work report.-Primary data-Secondary data.For my project, I decided on primary data collection method for observing consumerperception for TATA NANO and approaching customers directly in the field, comparingand references to know their preference. In survey approach .I selected a questionnairemethod for taking a customer view because it is feasible from the point of view of mysubject & survey purpose.I decided on secondary data collection method was used by referring to variouswebsites, books, magazines, journals and daily newspapers for collectioninformation regarding project under studySample size :- The sample size is 330Sampling method:- The consumers are selected by the simple random method [14]
  24. 24. qestionnaireDear respondents, I am a student of Shri Shankracharya institute of management & technology. Asa part of my curriculum I am conducting a study on “consumer perception & futurepotential for TATA NANO ” It would be a great help if you please spare some of yourtime to fill this questionnaire. The responses would be kept strictly confidential & use todata analysis A) Name ----------------------------------------------------- B) Age -------------------------------------------------------- C) Designation ---------------------------------------------- 1. What is the first thing, which comes into your mind when you think about NANO? a. cheap b. economical c. affordable d. compact2. Instead of purchasing a Bike, will you prefer to go for the NANO?1. Yes2. No3. Can’t say3. Which feature of NANO attracts you most, that inspires you to go forNANO?1. Price2. Design3. Mileage4. Interior space5. All the above6. Can’t say6. Do you think NANO is peoples car?1. Yes2. No3. Can’t say7. Will you recommend NANO to your friends and relatives?1. Yes2. No [15]
  25. 25. 3. Can’t say8. Which small car would you prefer to buy?1. Maruti 8002. Tata NANO3. Other………………..9. How long can you wait for NANO?1. 1-2 months2. 2-4 months3. 4-6 months4. Can’t wait10. If the price of NANO rises, would you still purchase it?1. Yes2. No3. Can’t say11. Will Tata be able to maintain the price of NANO in future if there is hikein cost of raw materials?1. Yes2. No3. Can’t say13. Will there be traffic problem with the introduction of NANO on Indian roads?1. Yes2. No3. Can’t say14. Can you trust NANO for safety?1. Yes2. No3. Can’t say [16]