Mba- Cim - Tata Nano Case Study
Executive Summary
Tata Motors, the General Electric of India is a conglomerate with a commanding presence in a vast industries across India and globally. In January 2008, Tata introduced to the Indian public it’s ultra cheap car “Nano”. The expected retail price for the Nano was expected to be as little as USD2,500 and would cater for the fast growing middle class segment of the Indian population. Tata Motors was set to change the face of the automobile industry in India. This was however met with some challenges, given the economic environment of India and thereby causing a delay of the launch by six months. The introduction of the “People’s car” created a new category/ trend of ultra cheap cars which then led to other auto makers following in hot pursuit to roll out their own brand of vehicles in this category.
What inspired Tata Motors to build the Nano? Why was there a need for an inexpensive car in India?
In India there were fewer then 10 cars for every thousand people in 2007.
Middle class household incomes in India start at roughly USD6,000 – USD3,000 per annum. While only 8 million Indians at that time owned a car (Crisil) another 18 million have the means to buy one.
The idea of Nano–The People’s Car was inspired by the middle class Indians who bought and transported their entire families on scooters. To most middle class families in India owing a car is a far cry. Rattan Tata, Tata Motor’s Chairman said that the tiny car is aimed at keeping the families of India’s growing middle class from having to travel with as many as four people on a scooter. It led him to wonder if a safe, all weather form of transport for a family can be conceived at an affordable price. It took Tata motors four years to realize this concept which today is a People’s Car, which is affordable and yet built to meet safety requirements and emissions. The advent of Nano has seen an increase of about 65 percent of Indian families who can now afford to purchase a car.
Tata Motors, the General Electric of India is a conglomerate with a commanding presence in a vast industries across India and globally. In January 2008, Tata introduced to the Indian public it’s ultra cheap car “Nano”. The expected retail price for the Nano was expected to be as little as USD2,500 and would cater for the fast growing middle class segment of the Indian population. Tata Motors was set to change the face of the automobile industry in India. This was however met with some challenges, given the economic environment of India and thereby causing a delay of the launch by six months. The introduction of the “People’s car” created a new category/ trend of ultra cheap cars which then led to other auto makers following in hot pursuit to roll out their own brand of vehicles in this category.
What inspired Tata Motors to build the Nano? Why was there a need for an inexpensive car in India?
In India there were fewer then 10 cars for every thousand people in 2007.
Middle class household incomes in India start at roughly USD6,000 – USD3,000 per annum. While only 8 million Indians at that time owned a car (Crisil) another 18 million have the means to buy one.
The idea of Nano–The People’s Car was inspired by the middle class Indians who bought and transported their entire families on scooters. To most middle class families in India owing a car is a far cry. Rattan Tata, Tata Motor’s Chairman said that the tiny car is aimed at keeping the families of India’s growing middle class from having to travel with as many as four people on a scooter. It led him to wonder if a safe, all weather form of transport for a family can be conceived at an affordable price. It took Tata motors four years to realize this concept which today is a People’s Car, which is affordable and yet built to meet safety requirements and emissions. The advent of Nano has seen an increase of about 65 percent of Indian families who can now afford to purchase a car.