Nano’s topsy-turvy ride in India

For the car which has received the applause and accolades of all kinds from across the globe when it was first unveiled, who could have possibly imagined the bumpy ride it has had ever since?

Beyond a shred of doubt, the biggest setback for this car, which was dubbed as a Revolutionary car, in its gestation period was the traumatic factory shift from the Red-communist bastion of West Bengal to Sanand in Gujarat. This in effect derailed the launch schedule by over a year. It was initially mulled that West Bengal’s loss was Gujarat’s gain, which surrounding the buzz around Nano was evident. However when the car was finally launched and bookings were made public, the Nano frenzy was kick started, the media went into over drive, it was projected as the next big revolution. Ironically, Tata Nano was conceived by Ratan Tata to fulfill the deep rooted desire  of an average middle-class Indian, more or less trying to reduce the disparity in the economic class warfare of our country, which is also a self-proclaimed motto of every pro-communist. The Communist-capitalist-socialist argument was put aside when the company racked up over 2, 00,000 fully paid bookings. Which if translated into practical terms of production capacity meant a four year waiting period.

The company could have sold off everything it made, but just months before the Sanand plant was fully operational, the highly publicized incident of a Nano catching fire battered the car’s reputation for its worst.  After clocking a high of 9,000 units in July 2010, sales figures have sharply taken a trip down south to a shameful of 509 units in the month of November 2010.

What could have possibly gone wrong? It’s not just one factor that is responsible for its dwindling prospects. The relocation of plant messed up the entire schedule and with the long waiting list, potential customer began to lose interest. Also it must be noted that the first round of bookings for the Nano became a lottery for many hence it was hard to gauge the true demand for this car. The weird booking system actually was repugnant to the genuine buyers who for all said and done couldn’t buy the Nano. Another limiting factor was the fact that company opened sales in select states a year later. Even till today, sales are open in only 12 states.

However it was the horrific jaw-dropping sight of a Nano ablaze that is responsible for scaring the buyers away. The auto giant has claimed in recent months that it has identified the cause of the fire and has introduced a series of modification and upgrades to tide over this problem. There have been no untoward incidents of fire but still customers are wary. The visual memory of that horrific incident has been glued to the mind of the potential buyers. The self-appointed advertising experts have scrambled to give a cause celebre for this phenomenon. They came up with the conclusion that Tata motors have been complacent owing to the fact that they received huge bookings and didn’t implement a comprehensive advertising strategy to keep the brand called Nano pumped up in the market place as also in the minds of the customers. The Tata’s reaction for the same has been reactive.

There are other much subtle factors which Tata as a company did not foresee. Many of the Nano’s potential customer and target audience want to own the car but don’t buy it because they can’t drive! Tata which is known for its detailed analysis should have foreseen this by taking a lesson from the market leader Maruti.

To tackle the same issue, Maruti has enlisted heavily in its first time customer into Maruti supported driving schools. Beside this many of the average middle-class Indians who were supposedly the targeted mass were not found creditworthy by the bank and hence were denied loans. This leads us to a much larger question. Does Tata know who the real Nano customer is? One of the views is that Tata motors are addressing an entirely new segment of people who never considered buying a car due to the sheer economics of it. This new segment, in which the Tata Nano is the only player, will take its own time to evolve and develop.

The recent case of hike in the sales of Maruti Alto can be attributed to the recent hike in price of the Nano (a cardinal sin). It also suggests that if people can afford a Rs 1-lakh Nano they would certainly not mind spending a few extra grand on a tried-and-trusted product.

However it would be utterly outlandish to dismiss the Tata Nano based on the record of a few month sales. The car is in its infancy stage and the entire might of the Tata Motors is putting their weight behind this car to ensure its success. One alternative decision could be the launch of a Tata Nano V2 with all the changes and improvements that have been on the anvil. Bringing the launch schedule of the diesel variant would certainly help too.

What Tata Motors has for a given are a few thousands of satisfied Nano buyers. They certainly are feasting on the car’s space and mileage (fuel efficiency), two key factors in Indian market scenario which Maruti Alto can’t match. If it can be assured that no Tata Nano will again go up in flames, there’s nothing better then WOM (word of mouth) to restore customer confidence. The recent 4-year/60,000km warranty will also certainly add up positively.

It may be a long ride but it wouldn’t be a surprise if the Nano emerges from this deep ravine to eventually take its natural place in the sales charts.

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