Monday, 28 June 2010

Tata's Nano gains from petrol dereg

Tata's tiny Nano, the world's cheapest car, was planned as basic transportation with high fuel efficiency (as discussed on p. 122 of the new edition of Essential Guide to Marketing Planning).

Now the Nano looks likely to become even more popular as India deregulates the fuel market and drivers feel the effects in the form of higher petrol prices.

Some observers see Tata gaining more broadly in India because it also markets several diesel cars, and diesel fuel is cheaper than petrol at this point (but possibly not in the future).

Tata's sales are already strong, and with the dereg, the marketing environment is more favourable than ever. In fact, Tata has just decided to go into the financial markets to raise more cash for expansion (having cut debt over the last year).

Meanwhile, Tata has been promoting its Nano with a cross-India drive that attracted media attention and showed the car's capabilities. The Nano appeals to buyers trading up from motorcycles as well as first-time vehicle buyers who might otherwise not be able to afford any type of motorised vehicle.