It’s been 7 years since a well engineered vehicle went down in the Indian market. What were the reasons? Here’s what we believe are the reasons to the question – Why did TATA Nano fail?
1. Misaddressed ‘the cheap car’ officially.
Yeah we know it was monetarily low on cost to purchase, but using the term ‘cheap’ as a USP was a big mistake by TATA motors. It was like calling Sachin Tendulkar ‘the short man’ instead of ‘the little master’. Consumer mentality discerns between cheap and expensive at a very personal level. Cars are personal objects that people use to display their social status. Nano failed with the words ‘cheap car’ floating around in the market to such an extent that some people were even quoted saying “I’d rather travel in an auto-rickshaw than be seen in a Nano”.
2. TATA Motors product inconsistency.
TATA Motors is known to manufacture large vehicles. The smallest of their non-commerical vehicles have been large SUVs and commercial vehicles have been tractors and trailers. But TATA Motors is more famous for manufacturing Industrial use machines, trucks and busses and coaches. One fine day, the company launches a car that sold for a little over Rs 100,000, has a size almost as large as an Indian Auto-rickshaw and looks like a ‘mouse’. We’re not sure if that’s an eye sore to be honest, but certainly a product misfit.
3. Initial long waiting period.
When the Nano was launched, it had very large waiting periods before the car could be delivered to their purchasers. The company took 21 months to complete deliveries of over 100,000 bookings. The credits go to the immense popularity of the Nano during launch before the marketing and incident blunders that rolled in. Over 3.5 lacks units were to be manufactured, booked and delivered in a very short time. The result? Many bookers had to wait a long time for deliveries. While the closest competitor Maruti Suzuki Alto 800 had higher sales figure, it still managed to convert a lot of Nano bookers into Alto buyers.
4. People’s claim of Nano being a 3-wheeler built on a car chasis.
Three-wheelers are auto-rickshaws in India which seat three people and run in a black and yellow livery all across India as a medium of public transport. When a Nano and an auto-rickshaw were made to stand abreast, people were surprised to see the similarities. The size figures of the Nano and the Ric are pretty similar if not the same. In 2011, when media and the people stamped the Nano as a 3-wheeler, Nano’s days were numbered starting then.
5. Incidents and Accidents in the middle of their Marketing campaign.
Sometime soon after the launch of Nano, a series of accidents came into light when some Nanos caught fire in New Delhi, Mumbai. It’s been a downgrade of sales since then. 85% sales were lost to three such incidents recorded within two years of launch despite of the concerned spokesperson mentioning the car to be safe and denying that the Nano was vulnerable and unfit for consumer use. Loss of sales were attributed to the detrimental effects of these incidents.
6. Bad PR
The ill-effects of fire incidents were tackled with little motivation. Not much was done by the company to undo the damage done to the face of the little car. Even if much was done, it was certainly not enough. Nano was a great car for the middle class and a good PR campaign with serious efforts to uplift the image of the vehicle could’ve changed the outcome of the annual sales and could have brought it back in the Market. “Perceptions are hard to change overnight. It’s going to take us a while,” said Tata’s Mr. Arora.
Is there any hope for Nano?
There is hope, but it’ll be a tough march. Nano is certainly a good vehicle for a large mass of people in India. But as Mr. Arora said, it’ll take time to change perception of the masses. But, we also will have to see some serious efforts and a revamp of the marketing campaign to bring the Nano back as a popular brand.
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