Tata Motors thought it had a winner on its hands when it developed what it billed as the world’s cheapest car, the Nano. The four-door Nano was launched in 2008 for a low price of USD 2000 thanks to innovative engineering and effective cost reduction. However, it was soon clear that the new model had serious teething problems. The car was meant to cater to the needs of the burgeoning middle class segment in India who needed an affordable vehicle when transitioning to a four wheeler from a scooter or a motorbike. The problem was not the price, which was extremely attractive, even after Tata upgraded the Nano to Nano GenX with several upgrades like USB and auxiliary ports and Bluetooth and the price increased to USD 3,125. Other features which were added as part of this revamp were electric power-assisted steering and a bigger fuel tank.
The problem was one of image as the car is considered as very much a status symbol in India and nobody wanted to be associated with a “cheap” car. Another factor that affected demand was safety concerns after the Nano performed badly in crash tests. In NCAP tests that were performed in January 2014, the model received a zero-star adult protection rating and did not meet even rudimentary basic UN safety norms.
Through the years, the Nano has continued to perform badly when it comes to the sales figures. In June, Tata made just one Nano, and this was really sad considering that 275 Nanos were made in June 2017. The same slump was seen when it came to exports, Zero Nanos were exported in June 2018 compared to 25 sent overseas in June 2017. Consumers are really value conscious and do not want to spend even USD 3,500 if they do not get value for their money.
The demise of the Nano highlights the need for extensive research about customers perceptions and requirements before the conceptualization and launch of a new model. Though at first glance, the Nano seemed to be a car that most customers would be eager to buy, it turned out that it did not agree with the image that they wanted to project. Cutting corners on costs also proved to be expensive in the long run.
Manju Mathew, an MBA in marketing, completed publisher training courses from the Oxford Brookes University and New York University. She started with marketing and PR roles before moving on to her current position as a full time writer. Currently living in Dubai, her life as an expat has sharpened her observation skills and flair for writing. She enjoys writing about luxury cars like Ferrari, Lamborghini, etc even if she can only dream of owning them.
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