Tata Motors
Dao Tran
MGMT405 12:30-1:45
Dr Yan
Case #3 Tata Motors
1. What inspired Tata Motors to build the Nano? Why was there a need for an inexpensive car in India?
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. When Ratan Tata of Tata Group looked out over this scene, he saw a critical job to be done: providing a safer alternative for scooter families. He understood that the cheapest car available in India cost easily five times what scooter did and that many of these families could not afford one. Offering an affordable, safer, all-weather alternative for scooter families was a powerful value proposition, one with the potential to reach tens of millions of people who were not yet part of the car-buying market. Ratan Tata also recognized that Tata Motors’ business model could not be used to develop such a product at the needed price point. By developing an inexpensive car, Tata could attract more consumers who were riding scooters or motorcycles. He believes that it could help increase pool of potential auto owners by as much as 65% to 30 million.
2. What innovative steps did Tata undertake to design the Nano in a way that would meet the $2,500 price tag? Do you think the low price automatically means poor quality? How did Tata Motors address
MGMT405 12:30-1:45
Dr Yan
Case #3 Tata Motors
1. What inspired Tata Motors to build the Nano? Why was there a need for an inexpensive car in India?
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. When Ratan Tata of Tata Group looked out over this scene, he saw a critical job to be done: providing a safer alternative for scooter families. He understood that the cheapest car available in India cost easily five times what scooter did and that many of these families could not afford one. Offering an affordable, safer, all-weather alternative for scooter families was a powerful value proposition, one with the potential to reach tens of millions of people who were not yet part of the car-buying market. Ratan Tata also recognized that Tata Motors’ business model could not be used to develop such a product at the needed price point. By developing an inexpensive car, Tata could attract more consumers who were riding scooters or motorcycles. He believes that it could help increase pool of potential auto owners by as much as 65% to 30 million.
2. What innovative steps did Tata undertake to design the Nano in a way that would meet the $2,500 price tag? Do you think the low price automatically means poor quality? How did Tata Motors address