Critical situation in organization and managerial skills
1. T h i s t e m p l a t e c a n b e u s e d f r e e i n a n y c i r c u m s t a n c e
Critical situation in an organization and managerial solution
Name :karthick R
Reg.no : 83
MBA B
3. Introduction
• The Tata Nano is a compact city car that was manufactured and marketed
by Indian automaker Tata Motors over a single generation, primarily in
India, as an inexpensive rear-engined hatchback intended to appeal to
current riders of motorcycles and scooters — with a launch price of
one lakh rupees or US$2500 in the year 2008.
• Numerous factors of sales volume, including delays during the factory
relocation from Singur to Sanand, early instances of the Nano catching fire,
the perception of the car being unsafe and lacking quality due to cost
cutting led to increased reliability.
• Tata Motors projected production of 250,000 annually at launch, actually
achieving sales of 7591 for model year 2016-17. The project lost money for
Tata, confirmed by former Tata Sons chairman Cyrus Mistry and confirmed
by current Tata Motors management.
5. • Nano was launched in the year 2009, and it has never witnessed a positive growth in its
overall sales. Last quarter ending September, 2013, its sale plunged 74% compared to last
year, as only 10,202 units were sold in this period. And previous quarter ending June,
2013, the sales went down 88% as only 948 units were sold in the month of April, 2013.
Last month, in October, its sales were down 28% compared to last year and the trend will
unfortunately continue.
• It is not that they are not trying. They tried to highlight the feel good factor by
introducing awesome videos and started exporting to Sri Lanka, Indonesia, Thailand and
Africa. But the results were again dismal. In fact, in the month of April, 2013, they
couldn’t even export one single car!
• After Cyrus Mistry took over the reins of Tata, he tried to reintroduce Nano as a Smart
City Car, for enticing young urban population and those with less space for parking. They
even invested a fresh capital of Rs 3000 crore into this loss making product. But the
results aren’t suggesting that the sale will pick up anytime soon, especially as the whole
automobile sector in India is witnessing a negative growth.
7. • Branding guru Jack Trout suggests, “Kill it, shut it, forget it”.
• He said, “People don’t want a ‘cheap’ car, which their neighbors can see.
Especially in India, there’s a prestige there’s a prestige thing about buying a car.
Tata Nano is hard to save, I would kill the brand”.
• But Ratan Tata as of now is still hopeful that Nano will revive and will become the
best selling Indian car in near future. No doubt his intention and ambition to
provide low cost, affordable and functioning car for the mass middle class is
appreciable, but the strategy he adapted to implement his dream backfired. He
must realize that India is now very close to shed its ‘developing country’ mode
and Indians want a class associated with anything they buy.
• As of now, he plans to re-launch the car in some other country, and then bring it
back to India under some other name or brand.
8. • As he shared in the interview, “Maybe it (Nano) gets launched in
another country like Indonesia, where it doesn’t have the stigma and
the new image comes back to India. Or maybe as a changed product
that gets marketed in Europe. There’s a lot of interest in Nano outside
India.”
• We hope that this latest branding technique works for Nano, and
people actually embrace the idea. But for time being, it seems that
Nano is still way too far from success.
