How Tata Nano Drove Itself Into Speed Breakers

  • Besides Nano, Tata Motors rolled out Manza and Vista. After the initial pull, demand for both the brands nose-dived just like Nano. After years of sustained poor performance, the company was forced to pull the plug on these 2 models, although Nano’s production still continues.
  • Last year, Tata Motors tried to shed the ‘cheap car’ tag and reposition the Nano as a smart city car on the lines of Maruti’s Alto and Hyundai’s Eon. With the launch of GenX Nano, the car saw a sharp mark-up in cost to the tune of 50%.
  • Despite the change, Nano sales remain low, even as buyers flocked in numbers to buy Renault’s Kwid. Insiders and market watchers believe that apart from the ‘cheap car’ tag, the negative publicity it received in the initial days, when Nano caught fire has become the main point of consumer rejection.
  • Tata Motors left no stones unturned when it came to marketing and sales. Two-wheeler trade-ins, cash discounts and free service maintenance were rolled out to draw customers to showrooms.
  • One of the biggest causes of worry for the Nano was the company’s near-failure to tap overseas demand. The Nano product development concept called for a car below Rs 1lakh, but the costs were always above this. The losses amounting from Nano have reached Rs 1000 crore.
  • Any turnaround strategy for the company requires to shut Nano down. Emotional reasons have alone kept Tatas away from making this crucial decision.
Date: 3rd November 2016
Sector: Automobile