Why Did Tata Nano Fail?

Tata Motors, an Indian automaker, designed and marketed the Tata Nano hatchback. Their primary launch market was India, where a modest compact automobile with a dispatch price of INR 100,000 ($2,500) was supposed to appeal to existing motorcycle riders.

The History 

The Tata Group is an Indian multinational conglomerate headquartered in Mumbai, Maharashtra. Jamshedji Tata founded the organisation in 1868, and it rose to global prominence through the acquisition of various foreign firms. It is owned by Tata Sons, a registered charity with the Charity Commissioner of India, and is India's largest conglomerate.

Each Tata firm or corporation operates independently, guided by its board of directors and shareholders. 

Tata had 30 listed companies with a total market value of around US$ 130 billion as of March 2017. Titan, which also owns Tata Steel, Tata Motors, Tata Consulting Services, Tata Energy, Tata Chemicals, Tata International Beverages, Tata Telefares, Crown Group, and Tata Communications, is one of Tata's major enterprises.

The Idea 

Mr. Ratan Tata came up with the idea for the Tata Nano. He was travelling on a rainy day when he saw a man riding his bike while carrying his complete family of four. Mr Ratan Tata noticed that the man was having a difficult time riding his motorbike because it was raining and heavy. 

This tragedy inspired Mr. Ratan Tata to create a car that was both affordable and large enough for small families to ride motorcycles.

His primary goal was to design a safer motorbike. He created two-wheeled bicycles and one with a safety cage around it, but neither seemed practical. He even contemplated designing a car without doors and replacing them with safety bars, but no one would want to buy a half-car.

After repeated design failures, he ultimately succeeded with an automobile that just comprised the necessities. 

He learned that the cost of making this car is roughly Rs. 1 lakh after a few days of planning and analysis. Mr. Ratan Tata was repeatedly accused of making the world's cheapest car, but he proceeded with his objective.

A group of engineers came up with the moniker Nano for a vehicle that met all automobile safety rules.

The Failure 

Tata had a difficult time recruiting Indian buyers due to early incidents of the Nano catching fire. As a result, one of the primary reasons why the Tata Nano failed was the notion that the automobile was risky due to the quality sacrifice made to save money.

Tata Motors was expected to distribute 250,000 Nanos each year. This, unfortunately, did not occur. In the 2016-17 fiscal year, however, just 7591 units were sold. Tata Motors announced in 2017 that assembly would continue due to Tata's concern for the project.

A sizable proportion of India's population still lives in low-wage homes. Many individuals in India still consider owning a car to be a pipe dream. Ratan Tata announced the debut of its vehicle nouvelle in 2008, launching a whole new segment of the automobile industry. He dubbed the car "1 lakh rupee vehicle" and advertised it as such.

Ratan Tata persisted in getting the Nano on the road, and he did so by July 2009. The number of inquiries for the car was initially enormous, but it progressively declined month after month. The vehicle's marketing strategy was mostly to blame for Tata's inability to attract customers. But how could the marketing have gone so wrong?

Reason of Failure   

Nano positioned itself as the most cheap vehicle. Nobody appreciates driving a "cheap" car. Tata launched this vehicle with the intention of attracting low-wage workers and their families, however despite its noble goal, the car is widely perceived as encouraging segregation. Furthermore, the use of phrases like "cheap" and "lakhtakia" in promotional materials and ads harmed its reputation.

Furthermore, the engine had an issue. The car caught fire due to an engine issue, as previously stated. Furthermore, the media speculated on what might happen if Nano became popular. It could indicate a downturn in the used car market.

Tata Nano targeted people with low incomes who had never considered buying a car. This, however, increased some of the opposition. According to the target audience, the media, and eventually the general public, portrayed the Tata Nano as a vehicle for the poor.

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