Revival of Tata Nano: Can the World's Cheapest Car Maintain the Momentum?

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Case Details:

Case Code : MKTG286
Case Length :13 Pages
Period : 2010-2011
Pub Date : 2012
Teaching Note : Not Available
Organization :Tata Motors
Industry : Automotive
Countries : India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts Contd...

A Spectacular Comeback

Tata Motors' efforts bore fruit with the sales figure showing signs of a revival after reaching its lowest level in November 2010. Backed by the television advertisements, provision of additional protection in the exhaust system, extended warranty schemes, incremental rise in sales point in smaller towns, and the introduction of the 90% financing plan through its in-house vehicle financing unit, TMF, this became possible. Sales of the Tata Nano went up dramatically to 5,784 in December compared to 509 units in November 2010...

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The Road Ahead

Analysts noted that the Tata Nano had shown upward growth since the setback in November 2010. Encouraged by the positive public response, Tata Motors was thinking of increasing the production capacity for the Tata Nano. The existing capacity of 10,000 units each month in the Sanand plant was planned to be increased to its full capacity of 275,000 cars per year. Many bikers were also warming up to the prospect of owning a new Tata Nano for the price of an expensive bike. Since August 2010, Tata Motors had started the open sale (without any pre-registration) of the Tata Nano and by December 2010, it was being sold in 12 states. The sale of the Tata Nano had since then picked up in five states and the company was also trying hard to reach out to its target customers in other states through its outlets and other access points. Tata Motors was planning on coming out with Big Bazaar like Special Nano Access points so that potential customers could test-drive the Tata Nano. Tata Motors was planning to capture each and every nook and corner of the Indian auto market with open sales by the first quarter of 2011...

Exhibits

Exhibit I: Profit and Loss Account of Tata Motors (In Rs. Millions)
Exhibit II: A List of Some Awards and Achievements for Tata Nano
Exhibit III: Sales Figure of Tata Nano (in Units)
Exhibit IV: What Makes the Tata Nano So Cheap
Exhibit V: Indian Emission Standards (Four-Wheel Vehicles)

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