[JayPrashanth]

Tata Nano = Engineering marvel + marketing disaster.

Why do compact sedans do well in India?

It's the boot plastered onto the hatchback that endows the car with a big "car" (Badi Gaddi) look (not feel). Car makers know that most Indians can't afford a proper C-segment sedan. So, the compact sedan category was created by a certain Tata Motors (with the Indigo eCS). Car makers are happy with the volumes and buyers are happy with the boot attached to the hatchback and of course the associated image.

So, hatchbacks themselves are seen by a vast majority of car buying populace as an entry point to the four wheeled world. Most hatchback buyers wait for the first opportunity to move to the more aspiration-al segments (sedans and SUVs). We now have the compact SUV segment category created, mostly for those who can't afford bigger SUVs. Harsh, but true.

In such a situation, the cheapest car/hatchback in the market simply doesn't have the image/status associated with it. Admit it, cars aren't basic forms of transport in India. We've got something called two wheelers. Cars are symbols of aspiration and not many want to be seen in a car that's the least priced.

On the other hand, a large number of Nano buyers are those who already have a car. So, it is more like you have enough money to buy a bigger car but want the compact Nano as a more practical option. It becomes more of a convenience buy than a sheer-necessity purchase. Nobody laughs at a guy driving a Nano, who has say a Honda City as his other car. The guy's image amongst his peers doesn't take a hit. But the number of such buyers aren't enough to drive 250,000 Nanos out of Sanand each year.

And then, we have folks who have no access to institutional credit but want a car. Tata Motors could have aggressively tapped into this segment. They almost did, with the EMI schemes for the Nano, but this was restricted to people who were moneyed/had stable jobs/income proof.

Of course, we don't want a sub-prime happening in the auto sector but then again, if credit worthiness can be assessed better and money disbursed for Nano purchases, that could have lifted up sales in a big way. A lot of plumbers, electricians, grocers, etc, who don't have bank-worthy income proofs but who can repay EMIs are excluded out of the institutional credit system.

The Nano Diesel/CNG won't do much given the car's current image. Rather, credit access to a wider swathe of prospective buyers and an image makeover (very tough from here on) could change things for the Nano. Once labelled a flop in the market, it is very, very difficult for a product to be revived. Example: new Ford Fiesta.

If the Nano wants to succeed in the market, an all new direction, perhaps something on the lines of an all-electric or diesel-hybrid model is needed. The car needs to become a tech-marvel of sorts, something that can genuinely make people go wow and be proud of being seen in one.

Side note: Tata Motors plans to use Sanand for small commercial vehicles (SCVs) and possibly a new small car (maybe the Dolphin project). With Tata itself giving up the idea of selling 20,000 Nanos a month (A figure that the Alto does regularly, one is left wondering whether the Nano will really get the all-out commitment required to turn things around.

Cheers,

Jay

[blackasta]

Originally Posted by amitk26

All the above suggestions means a new car and it should be sold with a new brand name with no overt or covert connection to brand Nano.
No more sumo grande or indigo Manza kind of goofups.

Tata pixel concept is already there. They can easily tap it for a road worthy model. Even the name.

http://www.tatapixel.com/default.asp

[dreadknight5]

Originally Posted by VW2010

Just reduce the price by 50K or 75K and the car will sell like cakes. Heck i will buy two to play go carting in Chennai traffic.

The pricing is the biggest flaw for a car claimed to be peoples car.

And worst of all between an Alto serviced by Maruti and Nano serviced by Tata, people chose Alto knowing that Maruti can serve better than Tata anyday.

I don't think Tata can reduce the margin levels by that much. I doubt they have profit levels to sustain that amount of reduction. Now If you ask Mercedes Benz to cut their prices by 50%, maybe they can do that. In my opinion, Tata doesn't have the profit levels to support such a drastic reduction.

[400notout]

I Dont think the problem with the Nano is the "cheap car" image. I think that The problem is that it just doesnt offer enough car, though considerably cheaper than the next available one.

It makes a good case for a 2nd car to run around in the city. It also is decent on the highway. I know people who dont mind doing a journey 1000+ kms on it.

Like a few others have pointed out, an engine upgrade to 800cc-1.0 range would make the car directly competitve to cars like alto 800 an the likes.

The car is spacious enough, though a lack of proper bootspace hurts. Installing a carrier is something which private buyers avoid as much as possible.

So for a new family out to buy their first car it shouldn't seem that they are getting compromised as they dont have enough money. A family of 4 will travel with atleast 2 suitcases.

Otherwise it can make quite a compelling car which you can bring home for upto 3 lacs on road.

[dreadknight5]

Originally Posted by Marauder

IIRC,Tata never advertised Nano as the world's cheapest car,it was all media hype.Also,I think initially Ratan Tata did not fix the price of the Nano at 1lakh but he later took it on as a challenge when media hyped that Tata would build a 1lakh rupee car.
Secondly,if you look at the car it does not seem that they have cut corners while building the Nano.

As for the Nano being a dud part,as others have pointed out it was all to do with the image it created with the public.Apart from the cheap price tag,it was also the initial hoopla surrounding the Nano criticizing its unreliability i.e. people hyping the fire stories etc.Also,other negative stories like the agitation in West Bengal regarding it's manufacturing plant,it all adds up.

Another thing which the public did not like was that it was not really a conventional car that the people were used to,stuff like the engine at the rear,non openable hatch etc.All of these were great engineering ideas but the public did not like that it was different from other cars they drove.

That is the reason that you see Tata now offering these new customized kits for the Nano.They are now positioning it as a stylish second car or a car for the young buyer looking for a city runabout.
I just hope it repeats what the Mini and the 500 did as it would be a shame that such a good car failed so badly.

Yes , it could have been media hype. But a normal person will not remember it as media hype. He/She will have the "cheapest car" ringing in their ears while looking at NANO.

Regarding cutting corners: When I look at the wheels of NANO, it resembles the wheels of my Kinetic Honda( College Days). The Wheel size of body height ratio looks low when compared to other vehicles. The plastic inside isn't of great quality. The Dashboard looks too Basic. Now its very difficult to have overcome this with the budget in hand. If they had put in 50,000 more, they could have made it resemble an ideal city commuter.

What could have worked for Tata was if they projected Nano as the bare-bone car with a plethora of upgrade kits. I guess TATA didn't have the time to explore this while launching the NANO. Now they do have such kits, but I get the feeling that it is too little too late. I agree that I am armed with the advantage of Hindsight.

[fz_rider]

Originally Posted by dreadknight5

Yes , it could have been media hype. But a normal person will not remember it as media hype. He/She will have the "cheapest car" ringing in their ears while looking at NANO.

The cheapest car tag, is, because of media hype. I still remember, days leading to launch, news channels going gaga over cheapest car/ one lac car/ lakhtakiya car and what not !

I never had a doubt about engineering marvel called Nano, but all the attention has been given to price tag.

[saket77]

Originally Posted by fz_rider

The cheapest car tag, is, because of media hype. I still remember, days leading to launch, news channels going gaga over cheapest car/ one lac car/ lakhtakiya car and what not !

I never had a doubt about engineering marvel called Nano, but all the attention has been given to price tag.

While I appreciate the praise that the Nano gets as a package, but I fail to understand why it is termed as an 'Engineering marvel'? That's like going a little too carried away in praising it, just like the media...

BTW, I think it was Mr.Ratan Tata himself who announced that the new car would be priced at Rs. 1 Lac. And the intention WAS to create a buzz in the media. What's the point in blaming the media for it then?

[fz_rider]

Well we can argue, was it Ratan Tata, or was it media. Was it initially going to be a 1 lac car or was it due to media attention. Only Mr. Tata can tell this !
Well if it was so easy to make a good looking car at 1 lac price-point, why wasn't it tried before? Common, give some credit !

[saket77]

Originally Posted by fz_rider

Well we can argue, was it Ratan Tata, or was it media. Was it initially going to be a 1 lac car or was it due to media attention. Only Mr. Tata can tell this !
Well if it was so easy to make a good looking car at 1 lac price-point, why wasn't it tried before? Common, give some credit !

Surely, credit given!

But the Maruti 800 was initially priced at Rs. 45K back in 1984-85 (Agree that its not factored/ adjusted for inflation, hence not directly comparable.). That was less than half the cost of the Padminis & Ambys of that time. And that was a big revolution in the Indian auto scene because of the unheard technology it had under its hood, at least for the Indian market. That could be termed as engineering breakthrough for our market as no other car was available at that price point with so many features.

Well, I can take you to another dimension on achieving the 1 Lac pricing of Nano with the political angle attached to it, but I think it will uselessly create a new parallel discussion, mostly political which does not look nice of this respected forum!!

Hope you understand.

Regards,
Saket

[dreadknight5]

Originally Posted by fz_rider

The cheapest car tag, is, because of media hype. I still remember, days leading to launch, news channels going gaga over cheapest car/ one lac car/ lakhtakiya car and what not !

I never had a doubt about engineering marvel called Nano, but all the attention has been given to price tag.

Yes Sadly, that's what happened. It should have been showcased as an engineering marvel. Instead it got classified as a cheap car.

[FlatOut]

Originally Posted by ritz3645

Pardon me but I think Tata should spin of Nano as a different entity and sell it as a company.
Leave aside emotions but it ain't working out, and Tata which has successfully bought and sold companies in past should do the same with Nano.
A VW Nano or FIAT Nano is more promising than a TATA Nano.

Not sure - the recognition for Tata as a brand and potential sales in emerging markets is simply massive. Making almost no money on each unit would probably pay off in sales elsewhere, if the car were successfully sold.

Originally Posted by fz_rider

Well everyone here knows why Nono isn't working ! It has to be the pre-launch hype of 'the worlds cheapest car' . Plus, Tata's not so intelligent marketing strategy.

Selling a car as a marvel of engineering yet still affordable would be the more likely way to a sales success.

Originally Posted by shankar.balan

It is a great feat no doubt, the Tata Nano.
But no one wants or likes to buy something that flaunts being 'cheap' as a virtue. further, no one likes to freely admit that they have bought cheap'.
It compromises self respect and does not massage the ego whereas, getting 'more for less' does not. It's a question of 'ego' and 'creating an impression' and 'keeping up appearances'. Why do you think there is such a huge 'aspirational' market for all things 'fake', especially the big name brands? I know lots of people who would prefer flaunting a fake name-brand Watch or Sunglasses or Bag, bought cheaply in China, rather than spend good money and buy a first class, quality Indian brand which they can easily afford within their means.

It will sell in large numbers if the government passes a regulation pulling all these horrid autos and other beastly modes of transport off the roads and offers subsidized Nanos for public transport. The same goes for the Reva or Mahindra E20. If this comes true then I shudder to think of the ensuing chaos on the roads!
I dont think Bajaj will ever stop lobbying for those beastly autos and their halfwitted 4 wheeler auto type things though!

I don't agree with such enormous government intervention to guarantee sales - at the end of the day, a product has to be good and sold effectively. But a little, subtle help from government would make sense. I'm not sure about the 'fake' point either, not everyone wants to appear to be the buyer of something which is a fake. Fundamentally good engineering, a positive, cool advertising campaign, reliability and fuel economy which is better than the competition is sufficient to sell a motor car in volume. Ego takes many forms - the most basic of which is the sort which parades a fake Rolex watch. Integrity and honesty still counts for a lot more than many may think, in the real world.

Originally Posted by Marauder

Another thing which the public did not like was that it was not really a conventional car that the people were used to,stuff like the engine at the rear,non openable hatch etc.All of these were great engineering ideas but the public did not like that it was different from other cars they drove.
I just hope it repeats what the Mini and the 500 did as it would be a shame that such a good car failed so badly.

The business of being different can be an obstacle - which is where a keen advertising and promotional campaign is vital.

Originally Posted by GrammarNazi

You never know, it may just start selling. Hike petrol by 7-8Rs, and image be damned, even the most conscious people will flock for the cheapest & most economical well engineered spacious city car.

AFAIK, Its much more crashworthy than the old M800.. It's a RWD, & offers better traction. It really doesn't need PS (drive & see, because this MAY be subjective).
Cumulatively, as more and more Nano's are sold/seen on the road, people will learn 1st hand experiences of people who own it. Personally, owning it has been an absolute joy .. I've barely spent anything on maintenance in the past 3 years (max ~1000Rs).

Fuel prices are accelerating in their rises, but of course India is a nation on the up, too. It is quite likely that with the right advertising and backup, the Nano could be more successful in Europe and Africa than a country which is getting richer, faster, than most.

Originally Posted by rohanjf

Unfortunately, this discussion is going towards what has already been discussed before (in some other thread).
I'd like to look at the two cases put forward by FlatOut: Mini and 500. How were these marketed? I get a feeling that they were not marketed as world's or country's cheapest car. Back then, I believe there were very few alternatives.
Back then, parking may not have been a problem.

Well, if this thread is simply repeating what has already been said, why bother to comment, rohanjf?
Two cases put forward - you ignore the third, the first I mention, the 2cv. This was the only car of Europe's three genuine minimalistic motors which didn't require a special, racing edition to ensure sales. It was the most complete and advanced, from an engineering perpective - to the extent that it could be the only competitor to the Nano if made in India today, with electronic engine control and fuel injection. Large wheels to see off potholes, amazing suspension to vanish speed humps and the most beautifully smooth engine for longer journeys.

Originally Posted by blackasta

A nano 'sport' version should be launched as a funky car targeting youth.
Replace that 'phat phat' Ace engine with something more powerful - a 1 liter engine is enough. Tune it for performance, not FE.
Get a hatch that can be opened, and replace 4 doors with 2.
Have a PS and optional body kit.

IMO TATA is just not trying hard enough.

Couldn't agree more, blackasta. The Fiat 500 and Mini's success both relied on having highly desirable sporting editions available to the public, which ostentatiously won in motor sport. The Cooper S, and Abarth.

Originally Posted by dreadknight5

Yes Sadly, that's what happened. It should have been showcased as an engineering marvel. Instead it got classified as a cheap car.

This sums up the opinion neatly.



As a non-Indian, someone who doesn't even live in India and who doesn't have an in-depth understanding of the Indian car market - who am I to comment? Well, I took great notice of the Tata Nano from the moment I heard about it. I'm a total petrol-head, with an appreciation of any great car - so I love a Citroën 2cv as much as a good Ferrari, a Mini as much as a 1930s Alfa-Romeo. Only cr*p cars leave me cold.

To correct a few comments, the Mini was not intended as a car to mobilise the masses - those on motorcycles and sidecars had been tempted onto four wheels by the Austin Seven in the early 1920s. It was a reaction to the popularity and demand for small, economical vehicles as a reaction to the 1956 'Suez crisis' which rationed our petrol supplies.
The little Citroën was originally the idea of Monsieur Michelin, who, being stuck in a horse and cart jam, considered the potential profits if all those carts were cars which had four wheels and wore Michelin tyres. After the German aggression was defeated, the car was redesigned with a steel structure (aluminium was massively more expensive after the war) and was in great demand from the start, due to its amazing combination of qualities. "Priority is given to those who have to travel by car because of their work, and for whom ordinary cars are too expensive to buy." Dealer sales contracts were provisional and customers needs were verified by the company. The deserving cases were country vets, doctors, midwives, priests and the small farmers for whom it was originally designed."

There was plenty of choice at the time for both Italian and British buyers - hence the slow initial take up. The Morris Minor from 1948 remains another lasting Issigonis classic and in many ways made far more sense than any Mini, it's just that the Mini was just the car for our 'Swinging Sixties' when Britain began to escape from post-war austerity and a Victorian attitude to so much in life. It also drove like a little racing car. It was sexy and cool in a way the Moggie Minor never could be.

The little Fiat was heavily criticized in its early days, yet in less than half the lifetime of the Mini or 2cv it sold over 4 million units. Ultimately, it was hugely Italian, so perfectly suited to narrow streets and the 'con brio' with which they approach their driving. The 'Abarth' sporting versions were beautifully quick and competed in motor sport, helping sales of standard models.

As well as having a sporting version available to the public, which gave the Mini huge credibility when it won year on year at famous rallying events, BMC also 'product placed' its little car to huge effect. Major British celebrities were seen with the car - John Lennon, Spike Milligan et al. Whether this same approach would work today with a more savvy public is not clear - BMW's use of Bond films didn't really work well.

I do hope Tata at the very top read Team-BHP forum - it is quite likely many of their management do. There is so much knowledge to be gained for free on here - they should use it!

Look at the sales of the VW Beetle, the car which was developed under Hitler in the 30s as a way of mobilising mass numbers of his army and which was resurrected (against all advice) after the war by the British, as a way of making use of the redundant factory at Wolfsburg. The car itself wasn't particularly economical or much good in poor conditions other than on a smooth surface in a straight line (which is what it was designed for) and with two doors and not much of a boot (trunk) it was hardly suitable for families - but it sold, eventually in massive numbers because the Americans bought it. The dealer network was superb and the car was very well built and constantly improved. It also had the most clever advertising campaign which turned its oddities into virtues, in the eyes of the consumer.

My own feelings are in agreement with the general concensus expressed above. I feel there has been a lack of effort post-launch - it's as if the company was convinced the car would be a success from the outset and still believe sales are bound to pick up. From what I've seen of the advertising campaign on YouTube, it's dire, targeted completely wrongly. I could have done better myself.

I feel there is a lack of a single vision for the car, a lack of love and passion - which is to be expected if no one person is responsible. The committee has many uses, but not for the design and execution of a motor vehicle. I believe Tata has a fantastic product on its hands, yet is failing to sell it, to the detriment of the whole of India. Sure, it's not the same as it was in 1950s France, England or Italy - but it's not that different, either. And the population is a great deal larger. Come on, Tata!

http://www.youtube.com/watch?v=lVzJYRte1vU

http://www.youtube.com/watch?v=E0-e4xWDLRU

http://www.youtube.com/watch?v=d8ABYGf4w04

http://www.youtube.com/watch?v=2PwEQ_-rdSA

http://www.youtube.com/watch?v=_7LapI0qm2M

[click]

Originally Posted by FlatOut

Look at the sales of the VW Beetle, the car which was developed under Hitler in the 30s as a way of mobilising mass numbers of his army and which was resurrected (against all advice) after the war by the British, as a way of making use of the redundant factory at Wolfsburg. The car itself wasn't particularly economical or much good in poor conditions other than on a smooth surface in a straight line (which is what it was designed for) and with two doors and not much of a boot (trunk) it was hardly suitable for families - but it sold, eventually in massive numbers because the Americans bought it. The dealer network was superb and the car was very well built and constantly improved.

A very well summarized response except that I don't agree with your assessment of the beetle. As a person who grew up around two of these little ladies, I can vouch for its reliability and economic viability. My father till date says that she was a joy to drive in any conditions. The best part of owning a beetle was that with little training you could tinker with the engine yourself rather than wait for a mechanic. And the cars shape though quirky, was and still is lovable (compared to the new beetle). Beetle was built to be tough and weather a lot of abuse, while still remaining reliable. That's why she was economical on the longer run.

Excellent marketing helped, but the joy of owning one matched the hype and that's why it sold millions.

[FlatOut]

Originally Posted by click

A very well summarized response except that I don't agree with your assessment of the beetle. As a person who grew up around two of these little ladies, I can vouch for its reliability and economic viability. My father till date says that she was a joy to drive in any conditions. The best part of owning a beetle was that with little training you could tinker with the engine yourself rather than wait for a mechanic. And the cars shape though quirky, was and still is lovable (compared to the new beetle). Beetle was built to be tough and weather a lot of abuse, while still remaining reliable. That's why she was economical on the longer run.

Excellent marketing helped, but the joy of owning one matched the hype and that's why it sold millions.

The VW was a superb car for German roads - but these were very different to any other (until the 70s) with extensive autobahns criss-crossing the country. What was needed was a car capable of maintaining good speeds on smooth, straight roads - and it was very good at this. However most countries' roads are a little more demanding than this.

So I think it was a victim of its day, when cars were designed for their home market. It wasn't VW's fault that their roads were so relatively undemanding and different from anyone else's.

I am comparing it with the Fiat 500, BMC Mini and Citroën 2cv. In my opinion - and I have driven them all extensively - the Beetle used about a quarter more fuel, had dangerous handling especially in the wet and ice (swing axles on the rear, combined with an engine cantilevered out behind the rear wheels) and for its size was not spacious. It was built to be tough yet it was certainly not as tough as the Citroën - but I agree it looked tougher to the casual observer. The engine had a weak point - it would drop a valve (always the same one) as mileage built, potentially wrecking the engine. But it was beautifully marketed in America and backed up by a superb dealer network - compared with American cars, it was tiny, fuel-efficient, cute and much better made than even the most expensive Yank tank.

Perhaps the most revealing fact is that only one component remained the same from the original cars when VW stopped making it in Europe, I think it was the bonnet handle.

[FlatOut]

MODS - please tack this onto the end of my last post, the internet connection went down before I had time to add this.


The common thread of all these cars is that they made relatively little money for their makers (but had a positive influence on the brand image overall) and all had brilliant marketing campaigns, which continued - indeed, escalated - throughout their long lives. The buying public often need reassurance and encouragement that a car which is unlike any other is a good buy since most have no inkling of what a well-engineered car is.

The advertising was often gently mocking and self-deprecating of the product being sold, even trying to humanise it and develop a feeling of love for it - which has been tried with with no other type of car. A whole new idea for selling cars was developed with the Mini and 2cv as they reached the end of the 21st century and were effectively museum pieces, with one special edition and paint job after the other. Citroën increased sales no end with the 'Charleston' models which emphasised the car's Bauhaus influence - it is this edition with Black and Maroon livery which is in the 'amour libre' advert above. They even had a special paint edition to celebrate a winning French yacht and one (of the rarest, today) which advertised a bottled water brand.

Having been coaxed into life (after a poor start in sales numbers) with a carefully planned series of famous owners who made their love of the car well-known, the Mini received a constant stream of updates down the years, even receiving fuel injection and an exhaust catalyst in its later years. As the 80s wore in to the 90s, you struggled to keep up with the special editions. http://en.wikipedia.org/wiki/List_of...mited_editions. This car was still relevant into the 90s with its tiny size perfect in traffic congestion - it could squeeze through tight spaces and park where there was no room for anything else. Its packaging remains unbeaten.

All these basic people's modes of transport were fine pieces of engineering - two of them superlatively so, yet they demanded a different sales approach from any other car to sell them. The public likes to think it has made a good choice when buying a car, most cars are sold with exaggerations of their abilities ringing in customers' ears. Slogans which confer superiority, power, ability, speed etc. You cannot sell a basic mode of transport, one step above a moped, like this. Honesty is the only way, so in comes a directness, preferably with a finely chosen sense of humour which suggests an intelligence rather than a weakness in the man or woman who buys the car. Weaving the car carefully into the fabric of a nation's life is also a well-used advertising ploy, suggesting the machine is as necessary to life as, say, a Catholic wedding in the case of 1960s France.

It seems to me that Tata has approached its advertising in the same way as it would with any other car. Yet the Nano is anything but any other car, and demands a totally different sort of campaign to win over Indians' hearts and minds. Yes, rising fuel prices will help, as will the built-in reliability of the vehicle, but there also needs to be an effective servicing and repair network which people can trust. In the case of the Mini, 2cv and 500 these already existed. Surely this isn't beyond a company which not only bought British Steel but also Jaguar and Range Rover?

[DudeWithaFiat]

Originally Posted by manij

a colleague told me just yesterday that he felt better and more comfortable travelling in an Autorickshaw than being driven in a Nano, he finds the ride/handling in the Nano's rear seat that much uncomfortable. This obviously needs to get corrected on priority on any upgraded model.

Its probably in your colleague's head . There are many who share the same exaggerated and imagined up views. When I suggested one of my colleagues of the Nano for her city drive, she said, "Isn't it better to travel in an autorickshaw?". So I asked her whether she has traveled in a Nano before and she said, "No." .

I had a chance to travel in the rear seat of a Nano couple of days back through some bumpy roads and it was half-bad. There was enough space in the back for and the Nano did cushion the potholes well.