Why A Gold-Plated Nano Will Do Little For Tata's Failing Car - Firstpost PDF

10/27/13
Why a gold-plated Nano will do little for Tatas failing car | Firstpost
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Why a gold-plated Nano will do little for Tatas failing car

by R Jagannathan Sep 20, 2011 #dream car #Durgapur #How This Works #Ratan Tata #Tata Nano 1301
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It was the Rs 1 lakh car that was supposed to set the domestic auto markets on fire. But it was probably damned by being called that: a Rs 1 lakh car that aroused concern that maybe something was sacrificed in producing a car on the cheap. No one likes being accused of owning a cheap car. On Monday, aided by group company Titan Industries plan to celebrate 5,000 years of Indian jewellery, the Nano one Nano was suddenly transformed into the worlds most expensive car with a possible price tag of $4.5 million. The reason for the price tag: the car is covered with 22-carat gold, silver and precious stones. At one stroke, bedecked with 80kg of 22 carat gold, 15kg of silver, and 10,000 semi-precious gems, a Rs 1 lakh runabout has been turned from cheap bauble to expensive billionaire bling. The makeover of the Nano is, however, the sideshow, for the real purpose of the shine-and-polish is to take it on a tour of Titans jewellery showrooms, presumably with Z category security in tow.
www.firstpost.com/business/why-a-gold-plated-nano-will-do-little-for-tatas-failing-car-87924.html 1/14
10/27/13
At one stroke, bedecked with 80kg of 22 carat gold, 15kg of silver, and 10,000 semi-precious gems, a Rs 1 lakh runabout has been turned from cheap bauble to expensive billionaire bling. PTI It does not address the Nanos own problems of which there are aplenty. With sales of an abysmal 1,202 cars in August, down 85 percent from the previous month, Ratan Tatas dream car is facing a nightmare on the sales front. The August figure is perilously close to the 509 cars Tata sold in November 2010, setting off alarms all over. April this year was the best ever month for the Nano when 10,000 cars were sold but that was a flash in the pan. So what went wrong with the Nano? And can its problems be fixed? The first problem, of course, is its positioning. A Rs 1 lakh car that wasnt a Rs 1 lakh car meant that the product prima facie didnt live up to its name. In hindsight, it is quite clear that Ratan Tata was a victim of his own utterances he made the promise of a Rs 1 lakh car in an unguarded moment, but costs couldnt be held that low by the time the car came to market. But then, successful marketers know that the gap between promise and delivery can make all the difference to its success. Tata flunked the test. The second problem related to fears about performance which were not helped by early reports of unexplained fires in some of the Nanos. The consumer who buys a car because he can afford only Rs 1 lakh will be more careful about his money than someone who buys a Maybach for his daughters birthday. Needless to say, the Nano did not get great reports in its initial months and this cost Tata. The third problem was how Tata dealt with low sales. Instead of dealing with the cars image and performance issues, the company compounded the problem by making it a down-payment and EMI-driven selling strategy. For just Rs 15,000 and sub-Rs 3,000 monthly installments, you could buy a Nano. EMI, unfortunately, is a game every carmaker can play. You can buy even a Merc for an EMI of less than Rs 30,000 today. Any small car depending on the loan tenure can be brought to the Nanos monthly level. By choosing easy payments as its new USP, Tata neatly landed in somebody elses turf. It didnt help. The fourth problem lay in its conception. Ratan Tata saw it as a car that people previously using two-wheelers would upgrade to. But that is not the kind of people who are buying the Nano at least not in sufficient numbers. It seems many of its buyers are people seeking a second car for fun and local, short-distance use. And there arent enough of them to soak up Nanos huge assembly line at Sanand. So is it a failure? Not by a long chalk. As Matthew Eyring, president of Innosight, a global consulting firm, notes, the real problem with the car was its initial hype. A cheap car thats not really cheap. A safe car whose safety has been questioned. A poor peoples car that poor people arent buying. That sounds like a failure, certainly. But really its not. Its par for the course for almost every breakthrough innovation. According to Eyring, Tata would have been better off launching and testing the car quietly before unleashing it before the world with great fanfare. It might not have been easy, but had Tata piloted the Nano quietly, on a small scale, perhaps through a limited production run in a small city like Durgapur in West Bengal or Ranchi in Jharkand, its engineering, pricing, financing, and marketing might have been adjusted far from the limelight to suit the needs of an optimal target customer. Thenthe Nano might have made its debut to the wider world with less hype and greater effect. It might not have been a Rs 1 lakh car or even an alternative to motorscooters. But when it first appeared in the mainstream, it would have been right product for the right price in the right market. But, its not too late to change course. Gold-plating the Nano and studding it with gems may get it noticed, but ultimately its whats under the hood that counts. The shine is an optional extra.
10/27/13
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8 comments
Newest Community meDilbert
2 years ago
Avatar
If NANO has failed then management is responsible not engineering. It failed to make even its employees realise that NANO is a Good car not cheap. When I went to book they were least interested to even share details. Customers were dejected by employees of showrooms and chose not to buy it including me.
3 Share
2 years ago
Avatar
S udhir
Inspite of everything what is good and bad I am very much proud about TATA because he is progressing worldwide in auto industry, and he had launched a innovative product like NANO,perhaps it may fail initially but finally it will succeed over period of time, because I had met one of the user and he was saying he had travelled about 330 kms in the single journey and was very happy with the performance, average and pickup. I had seen that car it is enough specious. There are many places in the world where this product can be sold, there is an entire world open for TATA I wish Tata a very good luck for success
3 Share
2 years ago
Avatar
Indian
TataMotor seems like an failure in passenger car segment. Other than Indica and Indigo not a single big sales no model. Now what is surprising they were leaders in SUV,MUV segment just 15-20 yrs back with models like Sumo, Estate, Siera, Safari. Mahindra came up with Scorpio and took away almost that entire segment n people at TataMotor never ever bothered to come up with good models for this segment n gave away all of it to Mahindra on platter. Looks like some sr management are traitors for this debacle. With Indica n Indigo as well hardly any new innovative models, when competition in this segment has changed so much with so many new players. Today other than JLR company hardly has any great hopes, so what seem like an success story is fast turning into an flop story unless company takes on competition by horns.
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Indian
2 years ago
Woes for Nano started with Singur here company lost close to 1.5 yrs time, this fuss at singur seems like competition blow, then Pricing is an issue also any new Tata models are bound for functioning issues, so overall every thing has gone wrong with this over ambitious project. Only way for tatas to make nano successful is by bringing down prices, good service network, else looking at its dwindling sale nos its going to be history soon
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Gues t
2 years ago
www.firstpost.com/business/why-a-gold-plated-nano-will-do-little-for-tatas-failing-car-87924.html
I think the problem was that they never did proper market research. If they wanted two-wheeler owners to see the car as an upgrade, they ignored the availability of second-hand cars like the Alto or Santro. They also failed to realise that for a motorcycle owner, a mileage drop from 60kmpl to 20kmpl is a hole that can't be bridged. Even if a middle-class consumer buys the car, it
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owner, a mileage drop from 60kmpl to 20kmpl is a hole that can't be bridged. Even if a middle-class consumer buys the car, it is destined to be parked away for the weekend, when the whole family can use it - sadly, usual Indian families can't fit inside a single Nano. On the other hand, if they had intended it to be a second car, they should have focused on safety, looks, finish and practicality. Instead, they muddled up the intended positioning and brought forth an ugly ill-fitted frog that no one wants to be seen driving.
4 Share
2 years ago
Avatar
Dwaipay anbas u
The Nano can be still successful if the Tata's think of re-launching it in a better package. Most middle class people today think of a vehicle which is not only value for money but also can give a little more comfort, especially those who are looking at a second car (this segment is a lot more). Tata's can launch Nano with an Automatic edition (this will be an instant hit since it will catch the imagination of large section of our working women) and an electric version (since the petrol prices are only moving northwards without any hope of stopping. I hope, Tata's are listening or else Nano can die a silent death like so many of our erstwhile "standard heralds" and "premier 118s".
2 Share
2 years ago
Avatar
Carumart ins
Tata Nano is not really a failure at all, it does take time for a breakthrough in technology to be accepted by the markets, people's minds have been conditioned by the media (like yours, with a misleading title). I have seen the Nano win hearts of many people, including mine... just how do you explain all the other car manufacturers running to make small cars to compete with Nano ?? I dont have a Nano yet, but I will soon get one once the diesel one comes out. And yes, its not my first car... i already have 2 other cars which cost more then 5 Laks.
1 Share
2 years ago
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Gues t
very rightly said...Nano had all the hype... it became like India England Test Series... there was a hugh hype on Sachin's 100th ton... & ended up loosing series 4-0...
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FAKING NEWS Firstpost

Why a gold-plated Nano will do little for Tatas failing car

Big is beautiful: Jaguar, not Nano, is Tata trump card

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