Tata nano (1)

TATA NANO

“The People’s Car”

History of TATA Motors

96 Companies

650,000 Employees

6 Continents

6th Largest commercial Vehicle Manufacturer

in the world.

2004 1st Indian manufacturing company listed

in NYSE

Manufacturing plants in India :

Jamshedpur, Pune, Lucknow

Assembly Operations across globe

Malaysia, Kenya, Bangladesh, Spain, Ukraine,

Russia and Senegal.

2004 acquired Daewoo commercial Vehicle co. Ltd. o Korea’s 2nd largest Truck manufacturer

2005 acquired 21% stake in Hispano carroccera o Spanish bus manufacturer

2008

Indian Automobile Market

Benefited after Liberalization

2005-2006 One among the largest and fastest growing

car markets.

Best and Top manufacturers of two and four wheelers

present in India

Rapidly expanding middle class increases scope of

wide market

Unveiled Nano in 2008

Questions

How would you segment the Indian

automobile market? Where is Nano likely to

have most appeals? Accordingly how should

it be positioned?

Second hand vehicle usersAuto Rickshaw MarketMiddle and lower income people

Positioned itself in the mind of people as “The people’s Car”

Will Nano cannibalize Indica and Tata’s other popular model?

Tata Indica – India’s CarLaunched in 1998Price Approx Rs 3,00000 starting

Tata IndigoEconomy car Launched in 2002Price approx Rs 4,00,000

Tata Nano“People’s car”Launched in 2008Price Approx Rs 1,30000

A news report on Nano

Tata Nano by Tata Motors will have only a marginal

impact on the sale of Maruti-800, said Maruti Suzuki

chairman RC Bhargava

Two-wheeler makers Hero Honda, Bajaj Auto and TVS

Motors, too, underplayed the anticipated impact of

Nano.

Mr Bhargava said, “Nano may impact the sale of our

entry-level model Maruti 800.

How do you evaluate Nano from the

perspective of Tata motors , perspective of

customers, and society at large?

Company Perspective

Tata Nano is a kit Car.

Innovation both in case of value for money

and comfortably

It gives margin 4-10% to dealers. 20 – 25% for

company.

Production of 350000 cars

Customer Perspective

Value for Money.

Comfort travelling experience

Low budget car

Society Perspective

Considered the market as middle class families

and college students.

“Freedom for Four”

What are the economies of the nano for

the channel members .viz component

suppliers, manufacturers and dealers ?

Component Supplier

90% of the products are out sourced

75% were single sourced

100 sub contractors

Manufacturer

Production of nearly 350000 Nano

Increase in cost of material by 10%

Margin around 20-25% overall

Estimated profit of nearly 900 crore (approx)

Dealer

Less outlets so scope of buying from particular

dealer is more , increasing the sales

Pre- booking Demand of Nano was more

during the starting stage .

Should Tata’s Sales and distribution strategy

be changed for Nano? Is the planned

distribution model of local assembly feasible?

TATA NANO is using Hub and Spoke Model for

distribution

TATA has many C&F Agents (Collects Nano

from hubs and distribute it across nation)

Sales & Distribution strategy

TATA NANO Distribution Model

Hub and Spoke Model

While the Nano seemed tailor-made for rural

drivers, Tata only has dealers in major cities.

Lack of dealers in the target market i.e semi

urban cities and rural areas.

Present Issues with sales and Distribution Strategy

Tata has nearly 200 dealers in major cities.

Reputation was damaged when five of the first

30,000 cars had engine fires.

The final nail in the coffin is the price: Rising

material costs pushed the car’s price up to Rs.

1.5 lakh the same as a used Maruti 800

Target segment

• Setting up exclusive showrooms for NANO• Developing Specialized Logistics Facilities

by collaboration with Specialized logistics providers

• Should Move from full range dealership to Product Based Dealership

• Financing better facilities like Tata Finance

Reinvent the

distribution strategy

Recommendations

• Dedicated Nano kiosks and Mobile display units, the company also can step up its drive through the hinterlands to spruce sales.

• Association with Retail Outlets like Vishal Mega Mart, Shoppers Shop, Pantloon etc. (Booking facilities, with promotion schemes like ‘Win Silver Coin’)

Reinvent the

distribution strategy

Recommendations

Suppose Tata wishes to go international with Nano then which countries will be suitable to enter and when?

Internationally we would like to place Tata

Nano in country like Bangladesh

Assembly plant present in the country

Cost will be low and scope is high.

Not developed country scope of selling to

middle class is High

High demand for low budgetary cars.

One more country in the list will be Thailand

More of two wheelers than four wheelers.

Some places they heavily depend on Two

wheelers even for tourism.

Thank You

Adarsh surana, Rishab chandan, Magesh veeramani, Princy koratty Sabari nathan