Why did the Nano not become the biggest hit ever?

In a cost-sensitive country like India, a car with a price comparable to some two-wheelers should have become an instant hit. Despite being a low-cost option, it was a four-seater, hence, it could have been the option many families chose.

Tata Motor’s vision was to make cars available to the lower and middle-class of the country. There was a huge gap in the automobile industry in this segment, and Tata Nano was born as a result. They wanted to bring comfortable and safe mobility to the masses and the car was introduced as “The People’s Car” at the 2008 Auto Expo.

It was presented and marketed as a “1 Lakh rupee” car—small but spacious with a capacity of 4 and no power steering, no airbags, and no A/C in the base model. The car stood firm on the quality, environmental and mileage checks.

But marketing the car as a cheap alternative to any other car proved to be a double-edged sword, which went against the company. India has grown a lot in the past decade or so, and the quality of life has increased considerably. But in 2008, cars were still not a commodity like they are today, and having a “cheap” car meant that your status in society was to be perceived as such.

The intention was right, to be able to make mobility easier for those who were not able to afford all the other options at that time. But the phrasing with words like “cheap” did not seem to go down with people too much.

At that time, the production of the Nano was also delayed due to a dispute the company had in West Bengal, due to which they had to shift production to the state of Gujarat. Due to this episode, a lot of hype that was initially created had calmed down by production time.

The on-road price of the Nano also came out to be more than Rs 2 lakhs, which was close to the price of Maruti 800 too. And with initial reports of some units of the Nano catching fires and the car being unsafe, further market share was taken away.

So Tata Nano flopped, but we can take away some pointers for ourselves from this case study:

• Marketing is paramount. If your product solves a lot of problems, but you fail to make consumers understand that, the product will not sell.

• Understanding your audience/consumer base before launching wide-scale products is important. You need to test your product with small audiences before launching in large areas to ensure better results.

• No matter how strong your brand name is, you need to satisfy customer needs or wants with each product otherwise every product that does not do so would not perform well.

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