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.

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.

12. Positioning of Nano

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

28. Thank you