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THE PEOPLES CAR
Tata Nano-A Giant Leap for a small car
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Mr. Ratan Tata explaining his Vision"I observed families riding on
two-wheelers the father driving
the scooter, his young kid
standing in front of him, his wife
seated behind him holding a little
baby. It led me to wonder
whether one could conceive of asafe, affordable, all-weather form
of transport for such a family. We
are happy to present the
Peoples Car to India and wehope it brings the joy, pride and
utility of owning a car to many
families who need personal
mobility."
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Introduction
Indian Automobile Industry
7th largest in the world
Contributes to 22% of Indian GDP
Handsome Turnover (` 3.285 Crores) & Export (` 495 Crores)in 2010-11
Fastest growing passenger Car Market in Mid 2011
Luxury Car Market to grow at 10 times whereas passenger
vehicle segment to grow 90 Lakh units by 2020
Favorable growth due to low vehicle penetration in the country
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Market Share by type of vehicle
76%
4%
4%
16%
two-wheeler three -wheeler commercial vehicles passenger vehicles
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Automotive Economic Ladder:2-Wheeler to Cars
0
500000
1000000
1500000
2000000
2500000
3000000
Price(Rupees)Nanos Entry at 110%
333% 45% 136%
140%
41%
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Tata Nano
Idea generation
To have a Safe, Affordable, all-weather form of transport for
nuclear Indian family
Opportunity at families owning 2-wheelers
Price tag of`1lakh
Idea Screening
Upgrading three wheelers to suit the design
Reducing the amount of raw material
Low cost Indian labor
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Contd.
Concept development & Testing
Target- pricing strategy
Innovative idea to deliver value incurring lowest cost for a cost
effective car
Bought 1000 acres of land in Singur due to good incentives,
resources & ease of transportation
Due to compulsions, shifted to Sanand in Gujarat
Full frontal crash & compact testing
Worlds cheapest car Introduced in March 2009
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Product defects & Actions
Before Launch : Issues in air conditioning, pick up & suspension
After Launch : Ruptured fuel lines in cases of full fire & faulty
wiring in the combination switch area in case of smoke
This led Tata motors to announce safety upgrades
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Sales performance-a bumpy ride
Delhi auto expo in January 2008 created pre-launch anxiety
among consumers
In mid august 2008, work was ceased at singur & this led to
unsatisfactory sales as against good pre-sale orders
The highest sales being in April 2010 & lowest in November
2010
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STP
Segmentation
Demographic: Family size & income
Behavioral: benefit
Target Market
Two wheeler segment
Second hand car user
Middle income people group
Positioning
Peoples car
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Marketing Mix
Product
Good brand name
Small yet comfortable
Better warranty than competitors
Price Offering lowest price in passenger vehicle
EMI payment option with 15000 down only
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Contd.
Promotion
Delhi auto expo platform
Upgrading dealers showroom to create suitable ambience
Positioned as peoples car
Place Wide distribution network across country
Huge network of dealership, sales, Services & spare parts
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SWOT Analysis
STRENGTH WEAKNESS OPPURTUNITY THREAT
Tatas Goodbrand name with
diverse product
portfolio
No power steering Fastest growingpassenger car
market in India
Dense traffic inIndian cities
Enviable
distributionchannel
Team lost
momentumbecause of the
lost land
Low vehicle
penetration in thecountry
Other low cost
alternative carscoming up
Huge network of
dealership, sales,
Services & spare
parts
Current base
price is 50%
higher than
promised price
Growing inflation
Good value
proposition
Inadequate
buying behavior
analysis of target
segment
Rising oil prices
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Contd.
STRENGTH WEAKNESS OPPURTUNITY THREAT
Uniquedashboard design
Quality & safetyissues
Negative mediapublicity
Vast technology
know-how of Tata
team leading to
first innovation
High lead time of
6 months initially
Small size
All weather
passenger car in
`1Lakh
Price tag beingwithin the reach of
2-wheeler owner
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Reasons for the failure
Lack of buying behavior analysis
Not living to the promise of`1 lakh base price tag
Two-wheelers are still best in peak-hour city traffic
Negative media coverage positioned Nano in a different way
Using relatively inferior raw material such as industrial glue &plastic spare parts
The rear mounted engine
Fear of quality & safety issues thinking that best parts are not
installed to meet the promise of low-cost
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