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…show more content… Choksey Shares & Securities Pvt
Tata Motors by introducing Nano has created a new category in the auto industry ie ‘ultra-low-cost-vehicle’. In the auto industry today we see automakers rolling out (not so cost friendly) smart cars, hybrid cars etc but we have yet to see a car that fits a low budget, environmentally friendly and fuel efficient (before the Nano). The advent of the Nano in the auto industry has now set a new benchmark for other auto industry leaders to follow in terms of innovation. Tata Motors thought competitors to first listen to what the people need, their affordability and only then work towards meeting that on an innovative platform. Following Tata’s footsteps, Ford, Nissan, Volkswagen, Hyundai and General Motors are working to reshape their operations and scurrying to introduce their own their own budget cars.
Do you agree that there is a future for low budget cars like Nano in other markets besides India? Do you think Tata Motors is going in the right direction by trying to develop its low cost Nano models adapted to European and U.S. markets? How could you evaluate likelihood of success of the Nano on the U.S. market? What should Tata Motors do to win American consumers?
In countries like India, China and Brazil we can see a rapid economic growth where lower priced cars are often best sellers due to its affordability. The success and future of low budget cars lie in these countries where growth