Introduction

Company Type –Automobiles

Established year - 1945

Founders - Jehangir Ratanji Dadabhoy Tata (J.R.D. Tata)

Headquarter– Mumbai, India

Services – Automobile Manufacturing and related services

Countries initiated in– India

Currently operating in – 125 countries

Tata Nano Car Project was launched by Tata Motors in 2008. Tata Motors has big name in the global market for manufacturing various types of trucks, bus and automobiles. It is amongst the top manufacturers of buses and trucks globally. In Indian market, the company has dominated almost major transport vehicles. Nano was a passion project as well as a solid idea to provide the car to untapped Indian market.

Details

In the year 2008, there was a lot of buzz about the Nano project before its official launch. The newspaper and other news media were full of news related to Nano project by Tata. After trying to find a location for a production plant to other states and location, Tata started its project at Sanand located near Ahmedabad in Gujarat. The plant was equipped with all the latest technology, robotics and world-class manufacturing equipments. It started producing the cars and distributing them to the customers.

The customers Tata targeted were middle class and lower middle class customers. The reason behind targeting them was an idea. Ratan Tata, who saw four family members travelling on a bike and adjusting themselves in a tiny space and after looking at them, he had an idea about manufacturing and proving a car which was compact, affordable and comfortable by at least four members. The phrase became known as “people’s car” everywhere in India.

In spite of having the capacity of producing 2, 50,000 cars per year, the plant could produce only limited cars due to less and less demand by the customers and the production went down year by year. According to Economic Times, in December 2018, the production of Tata Nano was 82 units and it sold 88 units. In the year 2019, Tata Nano production in December 2019 was zero. The “people’s car” slowly died down in the eyes of people and due to this, the production was also brought down.

When launched in the market in 2009, Ratan Tata promised to keep the price of entry-level model or base model of Rs. 1 lakh even if the prices rose to keep the promise intact. But the Nano car became a model that was incurring loss and the model didn’t reach the heights that Ratan Tata had in mind. Despite many chances of shutting down the entire project, Tata Nano’s production did not stop may be because of a promise made to the public.

The promises:

1.      Tata Nano promised a dream to the family

2.      Revolutionizing transportation

3.      Provide ease and comfort

4.      Replace two-wheeler bikes and scooters

5.      Affordablility 

The failures:

1. Worst product performance

2. Cheap look and feel

3. Faulty parts

4. Car was lightweight like a toy

5. No airbags and necessary features in base model

6. High maintenance costs

7. Overhype

8. Bad customer services

9. Unfocused and emotionless advertisements

10. Failed to realize people’s needs

11. Fire in some model

12. Not safe to drive

Nano being such an optimistic and revolutionary project had such high hopes but from the moment people got to see the initial model and how it performed out on the roads, people knew that it was a bad idea. The car specifications were also so not par with other products of other companies like Maruti Suzuki. Maruti Suzuki had various models like Maruti 800, Maruti Alto and other models to compete with Nano. Although the models were expensive but they were giving good performance and that is what matters.

While driving, the feel was not like other cars. It felt small, lightweight and cheap. When people are buying a car for the first time, they certain would not want to buy Nano because of lack of features and good experience. Those who bought the car better know how cheated they felt they got their hands on the much awaited car.

Many people reported about the system failure and other misappropriate performance issues. This led to news channels swarm the gates of manufacturers and ask them the questions for justifiable answers and they replied about the parts being faulty. When hearing this, the people got negative towards buying Nano and even stopped friends and family members to even think about buying Nano.

The car weighted and felt like it was not properly made like a car but like a toy. When buying a car the care should be put about the sturdiness of the car that can withstand any blows but Nano was a product of cost cutting at the best that did not have necessary functions and performance to meet a regular car.

A car without safety measures is a dangerous car that can put the drivers and rides lives in danger. To cut the cost and maintain the promise-price to Rs. 1 lakh, Tata Motors adopted new ways to cut the cost and that was to remove the air-bags from the car. Airbag being a necessary safety tool to save lives was nowhere to be found in Nano and due to this, the people felt the car was just a box without any features for safety and care for human lives.

A car is not like a two-wheeler bike and scooter that demands lower maintenance cost. A car requires regular maintenance and the like Nano which has higher maintenance cost due to its structure and material used.

When the car was announced the news about a potential car which was going to change the view of transportation was in every news channels, newspapers and magazines. It was printed everywhere and advertised to create so much hype that the customer would feel like buying a car until they saw the actual product which was not meeting even the normal requirements.

When due to faulty parts, the Nano caught on fire, the company did not attend to replace the model or replace the faulty part but instead they insisted on increasing the warranty period so the customer services were not so much appreciated by those who bought the car.

The advertisement of Nano covered mostly that imaginary content that showed Nano as a dream car. The advertisements were modern and mostly showing the feeling of happiness of buying Nano but never showed the features like mileage, safety or other critical features that a car should have. It did not personalize individuals and their happiness to buy but instead promoted overall crowd feeling of joy.

When a person buys a car he has a feeling of power and dominance in the society. He can feel proud and share that feeling among friends and family. But while buying Nano people felt low when they did not get the features they wanted. Sometimes having a car few accessories are what makes a car feel like a car and those key things were missing from Nano. This led people to consider certain aspects while buying Nano.

Some models were having faulty parts in Nano models resulted in fire that nearly cost the lives of the riders. In response to this, the company did not react well as it extended the warranty period. That was not nicely taken by the owners of the car. With such major problem existing in car and despite knowing the company did not respond well and that made people dislike the brand and related services more.

There is always a safety element involved with every car and that is what makes the people feel safer and secure. If a car cannot withstand a simple accidental damage then there is no point calling it a car and there is no point in driving it. The material used in manufacturing the car nowhere nearly meets the requirement. From the cars selected cars for Global NCAP for fontal impact testing, this car received zero-star rating for adult protection. Due to this, the car is not safer to drive on streets as it can cause death. The result was not as the company executives were hoping for but it shattered the trust of potential buyers.

Solution: 

There has been no such buzz in the market like Nano and there may not be in near future. Nano had a huge market to cover and a lot of potential customers, but it failed due to lack of attention to the customer and the need and requirements of those customers. Today, Nano car and the entire project is looked as a history that went wrong and that holds no good memories to cherish.

The key points in any project are what the market needs and what the company can provide. If the company can fulfil the needs of the market, then it is likely to thrive.

Tata Motors is not in any position to continue the Nano project and keep it running for more years as the demand for the cars is declining year by year and month by month. The company has been producing less and less car every year and the customers are also not interested to invest in such a car which does not have all the necessary features. So the project has died down for good.

What Tata Motors can do however, it can re-launch the product with design change and make a customer friendly product with various adjustments about safety, comfort, features and fuel efficiency. The name Nano can no longer hold any impact so either the company can re-introduce an entire new project or skip to their other truck and bus production which are doing well already and leave such a future projects.

Conclusion:

Considering market is a key thing in any business. In market also, there are social elements which play major role in buying pattern of the customers. So without analyzing the needs and wants and the important points, the company should not initiate any project as the project may completely fail like the Nano car failed or it may have a smaller chance to thrive but there is no surety about the latter one.

Key Learning:

To start something unique any company should analyze their model with prototype and testing. Without proper test and approvals, if the car or any other machinery or product is launched then the failure rate of one product may affect the behaviour of other buyers. Cost is not the only thing that the customers are looking for in any product. Sometimes the customer is willing to pay a little more for desired features and for feeling proud in the product so all those emotional points are very much important in any market setting.