Reviving Nano with a Twist

Published by MBA Skool Team, Published on May 03, 2014

Nano Car also known as “People’s Car”, a marvel of innovation in the automobile sector was brought to life by salt to steel conglomerate Tata Group’s Tata Motors. It was in 2003, when Ratan Tata felt the need of having a safe and affordable car for the common man. “What drove me — a man on a two-wheeler with a child standing in front, his wife sitting behind, add to that the wet roads — was a family in potential danger,” said Ratan Tata, while explaining why he went for the Nano. Finally, after a wait of five years, he delivered his promise and unveiled the car in January 2008 at the Biennial Auto Expo 2008, New Delhi. It was coveted as the World’s Cheapest Car with a price tag of $2500, as promised.

Expectations were high. It was seen a car that will change the way Indians travel. It was expected that it will be a profitable project in India.

The biggest hurdle was to position the car in India and abroad. The Nano car was targeted for people with 2 wheelers, concerned parents and retired people. It was fuel efficient and required low maintenance. With all these features, the car did not take off well in India. Although the brand TATA was attached with it, but it was regarded as “Cheap Car”. Other factors that went against the car were its limited features, average speed and low power, with super compact size, not an eye-catching design.

To reposition itself, many variants (Diesel and CNG) were launched. But still, these efforts failed to remove the stigma of “the cheapest car” or “a poor man’s car” from its image.

"I always felt that Nano should have been marketed towards the owner of a two-wheeler because it was conceived as giving the people who rode on two-wheels with the whole family an all-weather safe form of affordable transportation, not the cheapest." quoted Mr. Ratan Tata.

Zee News reported that Tata Nano sales clocked just 948 units in April 2013, a decline of 88% over the sales in April 2012 that were 8028 units. Society of Indian Automobile Manufacturers (SIAM) disclosed that Tata Motors witnessed a fall of 27.75% in Nano sales in fiscal 2012-2013 with 53,848 units compared to 74,527 units in fiscal 2011-2012.

With this, Mr. Tata admitted that Tata Motors made a mistake in the marketing and positioning of Nano. And he promised to revive the image of the car and re-launch the car with a refreshing avatar.

Tata Motors committed to better understand their customer needs and translate them into exciting and appropriate products and hence to increase the perceived value of the Nano with every subsequent launch.

Finally, in January 2014, the company delivered its promise and to infuse twist in life of Nano, it launched a new top end variant – “Nano Twist” at Rs. 2.36 lakh, ex-showroom price New Delhi.

The car was launched with a new repositioning itself as “Smart City Car”. The car has new features like power steering, improved interiors, remote locking, Bluetooth stereo system etc.

The five-pronged strategy that Tata Motors have followed this time is:

• Awesomeness: The car has been launched with “Awesomeness” branding campaign to target youth. They want youth to view Nano as a fashion accessory.

• Smart City Car: The Company has changed its positioning from people’s car and cheapest car to smart city car. If this positioning fits well, it might lift the sales volume.

• Revamped Dealer network: To make consumer’s experience more invigorating, the dealers will have better displays, trained staff etc. and the controls will be centralised.

• New pricing: The Rs 1 lakh tag is gone now. The new and improved variants are expected to be priced in the range of Rs. 1.75 lakh to Rs. 3.25 lakh.

• Advertising and Branding: Along with its “Awesomeness” campaign, the company has tied up with Sunburn festival and is planning to have on-ground activities and showcases in colleges to attract youth.

Keeping in mind the future prospects to revive the brand, Tata Motors has already begun working on an automatic version. The company is working with an Italian component maker to develop an advanced variant which will be based on cost effective clutch-less transmission technology. Experts stated that this technology would keep the price low and would give Tata Motors the option to pass on the benefits to consumers. The automatic variant of Nano will help boost its sales and will target another segment of consumers like lady drivers and urban customers etc. who desire comfortable ride at low price. The price is expected to be below Rs. 3 lakh.

This price point is closer to Hyundai Eon which is currently priced from Rs. 2.89 lakh – 3.95 lakh (ex-showroom, Delhi) and Maruti Alto 800 which ranges between Rs. 2.45 lakh – 3.65 lakh (ex-showroom, Delhi).

This low-cost pricing formula is expected to help Tata Motors to rectify its mistakes that it did with the Tata Nano six years ago and helps transform Nano’s fortune.

Tata Nano has come a long way since 2003- tepid reception from Indian consumers, dwindling sales, repositioning to change its image and the way people travel etc. Now with the latest launch - Nano Twist, let us wait and watch how the repositioning strategy will help Tata Motors to revive its brand-Nano.

This article has been authored by Nitin Sehgal from IMT Ghaziabad


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