Here's Why Nano's 'Cheapest' Car Tag is Hurting Tata

Widely touted as the world’s cheapest car, the Tata Nano has been a disappointment of sorts for the company. The car has failed to live up to its expectations with subpar sales performance.

Widely touted as the world’s cheapest car, the Tata Nano has been a disappointment of sorts for the company. The car has failed to live up to its expectations with subpar sales performance.  Now the company is looking for alternatives including launching the vehicle in other emerging markets, including Indonesia.

In an interview to CNBC, Tata Group chairman emeritus Ratan Tata admitted that it was a mistake to position the Tata Nano as the cheapest car.

“Maybe Nano gets launched in another country like Indonesia, where it doesn’t have the stigma and the new image comes back to India. Or maybe as a changed product that gets marketed in Europe. There’s a lot of interest in Nano outside India,” he said.

We bring you our perspective on what Tata could have missed out on:

1. The car should have been targeted at the urban middle-class and positioned as an alternative to two-wheeler. The Nano was primarily aimed at the two-wheeler segment and should have been promoted as a safe and a better option for people who could afford the 1.5 lakh car.
2. Despite its size, the Nano is one of the safer cars in India. It has cleared the European front- and side-impact crash tests. It had passed the Euro NCAP with a high safety rating. Tata should have promoted the ‘safety’ aspect of the car rather than promoting it as a cheap four-wheeler.
3. The Tata Nano should not have been built to a cost. In a bid to provide a 1.5 lakh car, the company was forced to reduce equipment level and space. If the promise had been to provide the best VFM (Value for Money) car and Tata had included more creature comforts, the product would have been more marketable.
4. In India, size and style does matter.
5. A diesel variant, priced at Rs 2.5 lakh, may be?
    

There’s not denying that the Tata Nano is one of India’s finest engineering feats but with the ever evolving nature of the auto industry, Tata would have done better to take a more realistic and practical approach to the Indian market.

-sriram@newindianexpress.com