The 10 year anniversary of the launch of Tata Nano is near, a car which was unveiled in 2009 targeting the families who use bikes as a form of travel.
It was supposed to be the most affordable car in the world, costing 1 lakh rupees. The suppliers who made the essential components for the product were positioned very close to the assembly plant of Tata Nano and worked to keep the number of components low so as to reduce the manufacturing costs. Additionally, the options available in Nano were very few. The manufacturing processes were highly standardized as a result.
The marketing team focused on the price tag of the market projecting the affordability factor of the car. They highlighted the utilitarian features and termed it as a family car.
These efforts coupled with the already hyped awareness worked out well for Tata Nano – until the fall of the product started. Parent company Tata Motors has confirmed that the production of the “people’s car” has been stopped, after exports were zero, versus 25 in June 2017.
The failure addresses a key misconception about the consumer, namely such heavy cutting of costs to popularise a model does not pay off in the long run. The consumer is value conscious but will refuse to buy the vehicle if the quality is at the cost of risking their own lives. The car had a tendency to catch fire.
The much-touted Nano — hailed as a “milestone in frugal engineering” — fell short on safety, ran behind schedule and produced questionable crash test results.
While Tata remains hopeful that the Nano “may need fresh investments to survive, a realistic view is that India is squarely a high-volume, few-models game and consumers are focused on value — which means getting as many features as possible for their money.