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
About Tata Nano
The Tata Nano, one of the most ambitious projects of Tata Motors, started in 2003. It was envisioned by the Tata Group chairman Ratan Tata himself. He found that Indians lagged behind in car ownership, especially compared to the European Union and the Americas. Just eight or nine in a thousand people owned a car...
The Downfall Saga
The major problem was yet to come with the sales of Tata Motors' much-publicized People's Car witnessing a sequential fall in 2010.
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In July 2010, Tata Motors sold 9,000 units of the Nano. This fell to 8,103 units in August, 5,520 units in September, and to 3,065 units in October. In November 2010, a festival month during which it is considered auspicious to buy new and big ticket items, the sale of Nano came down to just 509 units (85% drop from November 2009). This was despite the fact that the overall sales for the Indian auto sector rose by 45% in October 2010...
Reviving the Nano
The sequential downfall of the Nano's sales figure compelled Tata Motors to rethink and revisit its strategies. A eight- to ten-member crack team was put in place by Ratan Tata to address the situation. The team took various steps.
Addressing Safety Issues
As the major threat to the car's image was the fire incidents, engineers at Tata Motors made some changes in the Nanos existing design...
Financing
Tata Motors Finance (TMF), the Tata Motors vehicle Finance Branch, announced a special finance scheme for the Tata Nano, in which a buyer could get an easy loan with selected documents in just 48 hours...
Distribution Reforms
It was then the turn of distribution reforms. Beginning July 2009 when dispatches to those who had booked the car started, the company had delivered over 71,000 Tata Nanos by November, 2010...
Marketing Communication
Last, Tata Motors' initiatives to spruce up the Nano's sales volumes were not just limited to the finance fronts, distribution, and providing additional protection in exhaust and electrical systems in view of some fire incidents...
Excerpts Contd... -
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