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|2nd December 2010, 09:53||#31|
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There was a campaign by Tata in October where they were exchanging a Two wheeler for Nano. Their campaign was defenitely off track because;
1. They expected the people to spend more on fuel, in this inflatory era.
2. They expected the people to pay an EMI to the tune of INR 2000.
3. They forgot that Car is a weekend runabout for the potential buyers of Nano.
Additionally, the brand image created ensured that peolple donot buy it as second or third car. The other thing that gave a heavy blow was the inflation. The times are defenitely not easy for the lesser fortunate people. With the price rise, things have become extremely expensive.
In a city like Bangalore, if you earn around 20K per month and have 2 kids, then you are doomed. The montly rent + food cost + tuition fees + health requirements take away a major chunk of your earnings. Then where is the money left for paying a car EMI and fueling it? And this was the target buyer for Nano.
Now, how can Tata ensure more car sales?
1. Change the brand image of the product. Make it more desirable as a second / third car.
2. Launch Diesel Nano. Think of replacing Autoricks.
3. Include Power steering. Market it as a city car.
4. Reduce engine noise. Make it sound more like a car.
5. Make it a more comfortable car.
|2nd December 2010, 10:07||#32|
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I'd like to congratulate Sid for starting such a stimulating topic here.
I agree with most folks' opinion here, regarding the "image" factor affecting Nano sales.
It's a great car, fabulously engineered - given the severe production constraints - but it has been stuck into what the economists like to call "Giffen's Paradox". Beyond a certain limit, lowering the price of a product inevitably shifts the buyers' perception towards it being an inferior product.
The masses is India want a car that is inexpensive, but then, hey, it has to be inexpensive just for them. If it is inexpensive to their neighbors and their uncles, too, then it's - Cheap.
Car owners, especially first-timers, are way too high on pride than Mr. Tata seems to have guessed. And this is IMO the single largest inhibiting factor the potential Nano-buyers.
Someone gave an example of Reliance mobiles - But I would like to bring out another side to it. A lot of people (urban) who could not afford regular mobiles, also stayed away from Reliance cellphones, once they started being seen in the hands of Autowallahs and Raddiwallahs. Guys who had a regular mobile phone - (notice the unintended irony - even unwittingly I am using the term "regular" mobiles, instead of saying non-reliance mobiles) - also wanted to have a reliance, for it's inexpensive STD calling, but hesitated from actually getting it. Most of my friends in Pune as well as Cat-C towns from northern MH had only one thing to say why they would not buy a Nano - "It's not a 'proper' car..."
Another point mentioned here was the fact that all Indians do not live in the cities and that the opinions expressed here were city-centric. I agree, but consider the fact that although the majority of Indians do not live in the cities, it does not mean that they are informatically-isolated from so-called Urban India. They also have similar aspirations to urban Indians. Just because a person stays in rural India does not mean he would be ok with a seemingly inferior product. Also consider the fact that rural India would be better off with the second- and third-hand Jeeps that they use, given the primary nature of usage and geography (terrain and roads) they have to deal with.
In the end, price is the only reason behind the slowing sales charts for Nano. I think the game for Tatas was based only on the price, and since that one factor got inverted due to the Giffen's Paradox, we are looking at poor sales for a fantastic product. All other factors such as the fire-catching episodes and safety concerns have only added upon the existing discomfort in the customers' minds regarding the Nano.
What needs to be done?
I fully agree with the idea of getting on board a Celebrity Endorser, a la Cadbury. Also, why not use the existing price-point coupled with the celebrity endorsement and an excellent marketing strategy, to create a kind of "Reverse Snobbery" effect for the Nano? Just fold the product positioning inside out, and create a bohemian-chic (I believe this is the right term) image.
Think of all the rich guys in cities who wear fashionable tattered rags, adopt dogs, and vociferously support environmental issues - these guys are anti-establishmentarians to a large extent - they will not conform to the existing norms of prestige and perceived status, if they feel they are contributing to a real issue.
Think of the business honcho who wants to contribute to ecology-preservation, if only to make his daughter happy. He decides to keep his SUV for weekends, and gets around to using a Nano. Why not? There could be further such examples, too.
Tata needs to turn around and bring this marvelous engineering example back from the blacklist into the black. And I think getting out of the Aam Aadmi demagogy will be the first step. Once the Aam Aadmi sees the not-so-Aam Aadmi proudly using the Nano, the mass market will automatically be open for the Nano.
|2nd December 2010, 10:24||#33|
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I think TML would already be analyzing the issue. Is there any press release from their side? The picture could change when they bring in a diesel nano.
Last edited by Gansan : 2nd December 2010 at 10:25.
|2nd December 2010, 10:41||#34|
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The basic idea was flawed.
In the Indian context, a car just cannot replace the bike, for the majority. It can just co-exist with the bike, which means the target segment is not the guys who can afford only a low-end bike as the sole means of transport and seek 60kmpl, but those that can not only afford a car (+ a bike), but the moolah to afford the other costs that come with a car - low FE, taxes, insurance, repairs etc etc.
And for these people, the options are limitless in the used-car segment + the tried/tested low-end cars like the Alto/M800/Spark etcs.
BTW, in Kerala, most people even ignore the M800 and the pecking order starts with the Alto. So, chances are the Nano is most probably not even in contention.
The 1-lakh tag was another cause. While the price is nowhere near this figure today, the image embedded in people's minds is of a 1-lakh car aka cheap. Does not help things in a society where a car is more a status symbol than a transport solution.
|2nd December 2010, 10:58||#35|
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I feel that the used car market too is hitting the Nano sales big time. People would rather pay 1.5-2.5 lacs to buy a used Alto/Santro/WagonR which gives them a the feeling of having bought a car from a higher segment than buy a new Nano.
|2nd December 2010, 11:00||#36|
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Get Sachin as the brand ambassador. Such a nice product should not suffer this fate. Maruti brand has almost gotten into the genes of many buyers. have personally driven the nano and think its an excellent buy. I feel really sorry for the way it is faring.
Tatas might be better off selling the car to other countries and maybe work on Europa model ( The longer and more features) and sell it slightly less than Alto price.
An automatic gearbox which would work pretty neat would do wonders in the city with middleclass buyers for sure.
Plus a diesel version of the Nano should keep things on the track I feel.
|2nd December 2010, 11:13||#37|
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|2nd December 2010, 11:37||#38|
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This has interesting implications. It means that the first car is not a transportation solution but a luxury product. Even though that might sound counterintuitive. Even the family Ratan Tata saw on the scooter was clearly not "commuting".
As a weekend car, Tata Nano utterly disappoints. It is not fast enough to be exciting to someone coming from a bike. It does not excite anyone who has ever driven any other car either. It feels light on the highway. And it does not have room for luggage enough for a family of four.
What the first car buyer needs then is not a city car, which the Nano is. This may explain the K10 as well.
|2nd December 2010, 11:42||#39|
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Though I like to buy a Nano as a car for city use as a second car, the looks are tad bad!!! Sometimes Estilo (esp Pearl silver) gives a look like a Nano. The only difference I could make out is, Nano comes with eye lash or eye lids & a Nano without eye lid/eye lash is Estilo (Sorry Maruti). The eye lids is the turn lights of Nano!!!
Probably pricing Nano from a range from 95K to 2L & providing a tremendous options or customization will help to improve the sales.
|2nd December 2010, 12:00||#40|
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1. The vision was flawed
IMHO, the vision of attracting 2-wheeler users to migrate to a 4-wheeler was not well though of.
Its not just about putting in 1 lakh rupees. The total cost of ownership is much higher compared to a 2-wheeler. There is no comparison between the fuel efficiency and maintenance cost of a 2-wheeler and a 4-wheeler.
People buy bikes/cars based on their needs and financial status. Not every middle class family would start buying a 4-wheeler just because Mr Tata had the brilliant idea of producing an affordable car.
Nano may be cheaper compared to other existing 4-wheelers, but the TCO of nano just can't be compared to a Splendor or an Activa.
Like mentioned by Sid, the initial sales of Nano were because of the novelty and curiosity factor. But now, Nano is caught dead in the middle of proper 2-wheelers which are cheap to buy and maintain, and proper 4-wheelers which is a status symbol. In a tier-2 city, even a humlbe Alto is a status symbol for a typical middle class family, but the same can't be said about the Nano which is percieved as a poor man's car.
2. The fire catching episodes brought a lot of negative publicity to the Nano and people's mindset became that cheap price means cheap quality. There is no free lunch, if the price is less there must have been a compromise made somewhere.
3. The design issues like noisy engine, lack of luggage space and relatively small fuel tank make the car less usable as a family car.
The way out for Nano would be:
1. Automatic gearbox option
2. More powerful (800cc) engine
3. Diesel engine
|2nd December 2010, 12:06||#41|
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I think the boot door not opening and no PS are the reasosns stopping me from buying one. I think TATA should immediately add a PS varient and the boot should open in all varients.
|2nd December 2010, 12:50||#42|
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NOT the end of the road, surely?!
The TATA Nano was marketed as a car for the average man-on-two-wheels. It looks like, the majority of potential buyers did not like to see themselves (or be seen) as the average man-on-two-wheels.
One wonders how India would've responded had there been a campaign to position the Nano as a snazzy, little city rideabout for the (young) environmentally-aware working-class - a car for the 'New' India.
The average man-on-two-wheels would anyway have bought the car.
IMO, an image makeover, though extremely difficult, is not impossible. Let the agencies who are paid to do the thinking, worry about the 'How??'!
The product seems to be fundamentally sound, and it lives up to its VFM promise. My bet? It'll live on!
|2nd December 2010, 12:54||#43|
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This is a very interesting article & the discussion whould serve as an eye opener not only for Tata Motors but the industry as a whole. What went wrong with the Nano is not something which is going to be easy to answer. However after reading all the post I feel 2 things have been missed out:
1. Government Support - or rather the lack of it. Our Government did ABSOLUTELY NOTHING to support the initiative with lower taxes if not give outright sops which I am sure would have happened in any western country. The electric car also never took off in this country since taxes/levies were the same as a normal car.
If people feel that the car was no where near the 1L mark, think again. The ex-factory price which is the money which the company actually gets was indeed 1L, the others were taxes & insurance. Were people expecting the car to cost 1L on road? This brings me to my 2nd point.
2. People's attitude - This might have led to the slide in sales in a big way. We all expected the car to cost 1L on-road. There were so many people who asked me why the car was NOT 1L on-road. Come on people which company in this world will absorb insurance & taxes in its pricing? Being a Tata product expectations were also very high (nothing new, read a few posts above & you will get the drift). 14 inch tyres, openable hatch & what not and still maintain the car at less than 2L? I have so many people in my office who make fun of the car. Most mortals dont recognise the engineering marvel that the car is. It might not win any beauty peagants, but is surely not ugly in any sense either.
I am reminded of a yesteryears movie of Raj Kapoor - Mera Naam Joker. The movie was not that successful (calling it a flop is an insult) but was a super hit in Russia. The Nano similarly might not see the success here, but somewhere overseas... Only time will tell what hangs in its fate.
|2nd December 2010, 12:54||#44|
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I dont find a flaw with the Vision. It was a great idea from Mr Tata. However, while the target consumers seem to be the bikers and scooterists, the actual set buying seems to be different. It seems to be the urban consumers who can afford a car but want to buy a city car in the form of a Nano as another alternative.
The actual TG who Nano was intended for, in my opinion, needs a car that not just helps transport them, but also add to their status in society since these people buy a car for prestige. For these people, a car should be like a car. To me Nano seems less of a car (with its rear engine, lack of a proper boot, sound like an Auto etc).
Tata should hence look to positioning this car as not a cheap alternate to a bike, but more as a status enhancer for the core TG. I know nothing much can be done on the looks, but atleast Tata has to focus on its marketing efforts to make this a status symbol for the core TG.
Last edited by nurni76 : 2nd December 2010 at 12:57.
|2nd December 2010, 13:28||#45|
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I think what TATA needs is an aggressive marketing campaign. I have not driven the NANO nor have i sat in it. Till today I thought that NANO was a cheap car and didn't know nothing else about it. The kind of publicity that NANO had (screaming 1 lakh car headlines) has not helped it either.
TATA needs to change the perception of Cheapness of NANO. It can do it with the following steps.
1. Have a few simple TV ads which stress on the utility/quality of it. Make the NANO VFM rather than cheap. ADs should focus on the Mileage/space/comfort/maneouvarability of the nano. Focus on things like the cost to fix a DENT in NANO.
2. Have an AD showing a rich guy having the NANO as a good city roundabout. Stress on the safety/stressless aspect here.
3. Target people who are really concerned about utility but not too concerned about the image. For eg have a road show at some of leading IT companies. Target 25 year old software engineers etc who work in say a mcity(mcity is 55 kms away from chennai. The road is not safe for a bike period) and have to go there from MM Nagar. Just because a 25 year software engineer drives a NANO nobody is going to think he is cheap.
The story will be a different for a middle aged person who needs to maintain an image in society.
Actually when i think about it TATA should be able to get this done easily.
Last edited by vishnurp99 : 2nd December 2010 at 13:38.
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