Positioning the Tata Nano (A)

Sania Moazzam

Corporate Strategy

Revolutionize

• Ultra low cost cars• SEC C & D

Product Development

• Improve life’s quality

• Develop hybrid & electric cars

• Conserve natural resources

Acquisitions and Ventures

• Global presence

Market Invasion 2008Jaguar and Land Rover – FMC$2.3 billion Global expansion

2007

-2008

Relatively decreased

STILL 60% of all sales of all passengers and utility vehicle

2009Dropped to 54%

Industry Facts

2009> 11 million

vehicles

Average annual growth rate

17%

Two-wheelers as % of all vehicles

76%

Passenger vehicles as % of all vehicles

16%Country Per Capita Automobile Ownership

US 76.5%

UK 42.6%

India 12%

Indica’s Longitudinal Performance Years No. of Indica cars sold Percentage increase 2003-04 80,000 -2004-05 105, 521 31.9%2005-06 111,574 5.7%2006-07 144,690 29.6%2007-08 135,642 -6.25%2008-09 111,254 -17.9%

Years Passenger vehicles Indica’s Percentage 2003-04 N/A -2004-05 1,209,876 8.7%2005-06 1,309,300 0.88%2006-07 1,545,223 9.3%2007-08 1,777,583 7.6%2008-09 1,838,593 6.1%

Country per capita automobile ownershipUS 76.5%UK 42.6%India 12%

Case Facts

• Capacity limitation led to booking process• Online booking service fee(Rs 200)• Tata dealership booking service fee(Rs 300)• Booking fee represented the majority of the

final cost• Contracting with entrepreneurial engineers• Maruti 800 (the car for the Indian masses)• The two wheeler segment posed tougher

competition on the Nano

Qualitative Statements

“A Tata company shall be committed to good corporate citizenship, not only in the compliance of all relevant laws and

regulations but also by actively assisting in the improvement of quality of life of the people in

the communities in which it operates. The company shall encourage volunteering by its

employees and collaboration with community groups” Code of Conduct

Qualitative Statements

Tata promise to improve the quality of life--- guided its product development

Quality of life for women and children in India by supporting education and employment

Qualitative Statements

TML Dealership“Such a figure- a million cars- has never been

achieved in the country before. If it had to be done the conventional way, it would have meant investing many billions of dollars. So we looked at a new kind of distributed manufacturing, creating a low cost, low breakeven point manufacturing unit that we

design and give to entrepreneurs who might like to establish a manufacturing facility”

Exhibit 1: Ad for the Tata IndicaPOSITIONING THE TATA NANO (A) KEL602

Exhibit 1: Ad for the Tata IndicaPOSITIONING THE TATA NANO (A) KEL602

Exhibit 2: Top Competitors

Exhibit 3: Comparison of Nano Models

Exhibit 4: Comparison of Tata Nano and Maruti 800

Exhibit 5: Ad for Maruti Suzuki

Exhibit 6: Comparison of Tata Indica and Maruti Alto

Core Problem

Improve

Quality of Life

Threat to

environment

Positioning

Core Problem

- Introducing small, fuel efficient, low priced vehicles

- Contributing to air pollution- Against the Tata Code of Conduct

Other Problems

• Conflict at Singur – Protests from farmers

• Initial plan of producing 350,000 Nanos– Limited to 50,000

• Distribution of Nanos in rural areas– Hire entrepreneurial engineers– TML not confident for providing warranty

Recommendations

• Focus on college students– grab market share– achieve competitive

advantage

Recommendations

• Market share of Tata Motors and Maruti Suzuki India are 16.45% and 46.07% respectively.– aggressive marketing

• Unable to assume responsibility for warranty or liabilities on cars assembled by independent groups.– intensive training to engineers – design a proper task force team for quality checks

at different stages

Thank You