Tata Motors made headlines in the auto world when it introduced its ultra-cheap, ultra-small Nano car in its home market of India. As discussed in Chapter 6 of my
Essential Guide to Marketing Planning, the car serves as basic transportation, replacing two-wheeled transport for many buyers. Initial response was highly positive, and the entire first-year production run was sold out in advance.
Sales have
slowed since then, partly because of global recession, partly because of safety concerns, and partly due to increased competition. To boost buying, Tata has focused on safety, introduced a longer warranty to reassure buyers, and begun offering financing to help buyers afford the Nano.
As the world recovers from recession, these measures have definitely helped to drive higher
demand for the Nano.
Tata is also learning from its experience with the
Ace mini-truck, which has become quite popular in India. Now Tata is considering doing for the Nano what it did for the Ace: Opening
dedicated dealerships in smaller towns just for the Nano.
Despite the many challenges, can Tata use its Nano to significantly accelerate sales and profits in the future?
