An engineering marvel and a marketing disaster. These two phrases aren’t strange bedfellows at all, especially when it comes to the case of the Tata Nano. Conceived as the world’s least priced car, designed to get two wheeler users in India and other parts of the emerging world to jump onto the four wheeled bandwagon, the Nano’s positioning as the 1 Lakh Rupeecar proved to be the hatchback’s Achilles heel as the final price of the Nano came to well over a lakh rupees. Naturally, first time car buyers, enthused with the initial 1 lakh rupee price tag lost interest as prices of the reasonably well kitted out CX variant of the Nano came up to well over one and a half lakh rupees.
Initially its unique selling proposition, the “cheapest car in the world” moniker now sticks uncomfortably on the Nano given that a car is still an aspiration for the teeming millions in India, rather than just a basic means of transport. Then came the sporadic incidents of fires engulfing the small car and these incidents knocked the wind off the Nano’s sales. Also, the Nano’s positioning as the least priced set of four wheels in India meant that the car’s aspirational value took a deep nose dive. Understandably, sales of the Nano have been more than a little underwhelming even as Tata Motors embarks upon marketing campaign upon marketing campaign to get sales up to speed.
Despite a V2 version in the form of the 2012 Nano and a brand new feature filled variant in the form of the Special Edition model, the Nano has never really set sales charts afire. These improvements to the Nano come on the back of periodic marketing blitzkriegs that endow the car buyer with attractive discounts and exchange bonuses. Tata Motors has invested heavily in the Nano with a dedicated manufacturing facility that has the capacity of outputting 250,000 Nanos a year, with the capability of boosting this capacity to 350,000 units if demand rises. Along with Tata Motors, a slew of suppliers set shop at Sanand, Gujarat, and made big investments to cater to the projected demand for the Nano.
As things stand today, the Nano has not even managed to crack the 10,000 mark in monthly sales and this has led to the Sanand factory running at less than half capacity. Given that Tata needs to run Sanand at at least 60% of its capacity to make producing the Nano a sustainable effort, the car desperately needs higher volumes. Tata Motors has always been a tough cookie and is known for persisting for years to make its cars successful. The Indica is a case in point.
The Nano too could eventually become a success given that Ratan Tata, the visionary behind the Nano, has indicated that the car is due for a refresh. In the coming months, a CNG powered Nano will be launched in India even as Tata Motors ups the ante when it comes to the exports front. All said, it remains to be seen how Tata Motors will bail out the Nan0, a car that has proven to be the stiffest challenge for the Indian car and utility vehicle giant.