Tata Case

1053 WordsMay 11, 20125 Pages
To: Ravi Kant (Managing Director, TML) From: Subject: Nano Tata-logy: The People’s Car Date: 17 the September, 2011 Situation Overview TML is currently posed with a tricky question of how to go about the Tata-Nano (the much-hyped “People’s Car”) business strategy, given its commitment to release it on time with the promised cost and the spectrum of issues and recent developments that pose potential hurdles. Issues Operations 1. Political problems at Singur Plant which will certainly delay the Nano launch hinder meeting the demand and might increase production costs. 2. Would the strategy of becoming a “Systems Integrator” for Nano production be profitable and sustainable? 3. Affordability to produce Nano given such…show more content…
TML’s strategy of using independent assemblers to cater to the market demand seems wise at this point as Nano is not expected to meet the market demand all by itself. Independent assemblers will ensure that Tata spare parts market reaches out to remote areas out of TML dealership purview. It seems a profitable venture to sell modular production capacities, spare parts and be free of warranty liabilities. This is also aligned with TML’s commitment to the upliftment of quality of life. As for the issue of congesting Indian roads with cheap automobiles, statistics suggest that it is way behind developed countries (Like US) when it comes to number of automobiles. Traffic congestion can be fought better in developing economies by increasing /improving roads than by limiting the number of vehicles. Nano being a low emission vehicle addresses the environmental concerns. Recommendations 1. Immediate relocation of Nano plant and production commencement. 2. Using Independent assemblers to expand market for spare parts. 3. Concerted efforts on cost cutting to increase margin. 4. Lobbying with SAE to cut Government taxes and pass on the benefit to people. 5. Introduce attractive Finance options to improve accessibility of Nano to people with annual income $2500 and above. 6. Promote the base model and delux models of Nano to different niches. 7. Go global with Nano in markets where TML is already established, and sell at

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