Another great article by Business Today -
The new Nano promise Fuelled by five years of disappointment, Ratan Tata's little car wants to erase its 'cheap' past for a 'smart city' future.
Tata Motors' Ranjit Yadav and Ankush Arora
Excerpts from the article:
Delna Avari had spent the previous eight years doing short stints in different countries for Tata Motors' commercial vehicles division. She was in Bangkok when Ravi Kant, who ran the company at the time, called in October 2010. He wanted her to come back to India and join the Nano team. The vision for the Nano, said Kant, had not played out the way they thought it would. As understatements go, that was like calling a Ferrari a four-wheeled transport for two.
The Nano was unveiled in January 2008, exactly 100 years after Model T hit the road and helped ordinary Americans drive every day. The Nano, as the world's cheapest car, was meant to migrate millions of Indians from two wheels to four and prove India's supremacy in frugal manufacturing just as Henry Ford's Tin Lizzie had established the moving assembly line.
However, the month Avari moved, the Nano sold a mere 3,065. It had crossed 5,000 only in four of the 16 months it had been in the market. Its installed capacity was 15,000 a month.
Between two stools
It was never meant to be a Rs 1 lakh car; that happened by circumstance: Ratan Tata, Former Chairman, Tata Sons
That price was interpreted as 'cheap'. The current thinking, within the company and outside, sees that as the root cause of all that did not go according to plan with the Nano. "Nobody wants to tell his friends and neighbors he has bought a cheap car. The brand is damaged," says Jack Trout, global guru in marketing strategy. "It is a category that they maybe should not have got into."
THEN AND NOW
It was a different India in 2007, the year before the Nano was unveiled. The Nokia 1200, priced at less than Rs 3,000, was among the most popular mobile phones. Flat panel LCD televisions were sparse, the ones with bloated backsides were everywhere. Facebook had just come in. Flipkart had just been set up. Laptop computers vied with desktops for supremacy; tablets were what you had when the doctor told you to. And yes, there is a Nano variant priced at Rs 2,58,000.
Twist in the Nano Tale
As a manifestation of the plan, cheap is out, awesomeness is in. Jagdish Khattar, who ran Maruti in the years that the idea of the Nano excited and enthralled everyone, says that should have been the case from the beginning. "I would have given this car to people who owned Mercedes and told them, 'Sir, this is your third car, take it when you go out to walk your dog in the park. Everyone will buy a car if they think it is the one that the well-heeled drive."
Avari swears the affluent always drove the Nano. "When we launched, and through the booking phase, the car was picked up by the well-heeled; 80 per cent of the buyers wanted it as their third or fourth car." She sees evidence of this every day around her house in Mumbai's upscale Cuffe Parade area, which she says is full of Nanos. "All of them are driven by their owners.
Nano's advertising today, in contradistinction to the first Nano 'aa gayi' campaign, is an explosion of colour and music, with young people apparently having fun while doing things few do in real life. The Nano would be re-positioned as a "smart city car", the commercial raced to five million views on YouTube in 30 days, more than any other car commercial had garnered, according to The ET.
But if advertising alone could do the job, Martin Sorrell would be the king of the world. The Nano's new aspiration had to be constructed in drafting rooms and workshops. It went through several changes as newer versions emerged in 2012 and 2013. The latest, called the Nano Twist, is more refined and has a better steering wheel - a power steering, no less. Tata tweaked its suspension for better ride quality and added an anti-roll bar in front. The result is reduced body roll and better stability at corners. The power train was improved to increase peak power and torque, and the exhaust system for a more refined feel.
February's Auto Expo in Greater Noida gave a glimpse of the big things in store for the little one. The Tata Motors pavilion displayed a Nano with AMT, which appears to be the new tune many carmakers are singing to lure buyers. The technology makes city driving easier by doing away with the clutch.
Of course, the prices, too, have risen. Nano Twist's price takes it into the territory of Maruti's Alto. The value proposition has changed completely, but even today it is significantly disruptive," says Wagh. He would be hoping it would not only be disruptive but also attractive.