Team-BHP - Tata Nano-November Sales=506. Analysing the root cause and devising the solutions.

Quote:

Originally Posted by pgsagar (Post 2165662)

Wow! You can never be pleased, can you? An AC car for under 1 lakh? What do you say to bajaj's autorickshaws which sell for more than what Tata sells a full-fledged car for. And mind you this autorickshaw has no doors, one wheel less,, has a scooter engine and was designed some 35 years back.

Well said Sagar ! I dont know what it is but we always want more . However if the Japanese come and sell us some load of crap with a label of "Q Class " on it , it is considered luxury and reliability in a budget and we make these assumptions even without having seen or driven the car .

I've heard people saying , this car costs 1.8 , shell out some more money and you get an alto . When you can shell out that extra dough and then why the hell are you looking at the Nano in the first place .

The purpose of Nano and the target audience of Nano is very different. TATAs have invested heavily and faced a lot of trouble courtesy our very own sweet Mamta Banerjee . But they didnt scrap the project they went ahead with it , shifting operations to an another state altogether . I dont think the purpose behind this was recognition . Am sure it was one of the factors but I wouldnt say it was primary .

Like Sagar said , looking at the price band I would rather compare a Nano to a Bajaj Auto or a TVS Auto which sell for almost the same price .Correct me if am wrong , the base model of nano is cheaper than an auto . And for the money you shell out Nano is certainly a better deal compared to an Auto .

Nano, I believe was build like a city car , to be used for short distances . I dont think it was made to compete in Raid de himalays or to do a cross country. We have different cars for that. Just my opinion . !

Personally I was shocked when I read in a news article that the fire was mainly caused due to lack of fuse for some components (which got shorted). This to me is as bad as it gets when someone tries to control pricing and use cheap spares. But not using a fuse is not just cheap, that was a completely irresponsible attitude from Tata.

And mind you this is the problem mostly with Indian manufacturers. Most of you guys might have noted that in the electrical 'plug and sockets' that we use in Indian homes, very few have fuse built-in, BUT the ones we see in US or Middle east, all of them have the fuse. Its like a basic safety feature for them. When will India move ahead?? :deadhorse

Tata Nano garnered a lot of attention because of two things - 1) Lowest cost production car in the world 2) TATA Brand 3) Novelty factor.

In Metro cities and urban environment, people are quite image conscious. Take example in Delhi, a person would happily roam around on a premium motorcycle rather than being caught at the helm of cheap end of the four wheeler segment. Also, now the cost difference between Nano and that of Alto / M800 etc. is not very huge (especially when purchasing power of the nation in general has increased). First timers would prefer to wait a little longer and put in a bit more money to get a proper first car which has good resale value and associated status appeal as well. Nano sounds quite like a motorcycle which may further put off some potential buyers. Regardless of all the safety measures, people still have this general notion that this car would not survive in case of an accident. Most people are not bothered about crash tests etc. they have their own opinion and they stick by it.

In rural areas, two things rule ... Tractors and Jugaads (local improvised transportation). Both these are time tested and serve the purpose well. Jugaad is damn cheap with hardly anything to go wrong with it. You can get it repaired almost anywhere with basic tools and technical expertise. It can ferry people, goods with ease with great mileage on diesel. Additionally, the diesel pump / engine in Jugaad can be used in field for irrigation etc. Keeping all this in mind and that Nano is costlier than Jugaad, it has limited passenger space, almost no storage space and would certainly not able to tackle rough terrain like tractor or Jugaad, I sincerely doubt that Nano would be able to emulate success like Alto / M800. It would sell but would not set sales chart on fire for sure.

Thanks

In my opinion there are two major reasons why the product failed

1. In marketing lingo there is something called as product diffusion curve, which talks about how a products gets accepted by the market - and as per this model the acceptance depends heavily on the Innovators and Early adopters - people (from the target market segment) who buy the product early in its lifecycle. For Nano - the gap between time of launch and the time of introduction to market was too long (thanks to Mamta and Buddha) with the effect that the novelty of the product was lost resulting in lessened interest in the minds of Innovators and Early adopters of the target segment

2. There is a huge gap between the lower middle class, who can afford only a bike and the middle middle class, who can afford a M800. This is a vacuum actually.
People who can afford only a bike can may be stretch to a max Rs. 1L whereas people who can afford Rs. 1.5L to 2L can also afford 3L. So Nano in effect is targetting a non-existing customer segment. There is no way Nano is going to succeed in the current condition unless they move up a segment and make it infinetely more value (and quality) with comparable quality to an Alto. But I think it is too late now - at least in India

Quote:

Originally Posted by mallumowgli (Post 2167429)

For Nano - the gap between time of launch and the time of introduction to market was too long (thanks to Mamta and Buddha) with the effect that the novelty of the product was lost resulting in lessened interest in the minds of Innovators and Early adopters of the target segment

Not true.
When bookings began without even a test drive they clocked more than 2 lakh bookings with 95% booking advance, which means the novelty factor was still there.
People lost interest only after they started seeing the car on the roads and cancellations began. Simply put, the car didn't meet their expectations.

Quote:

Originally Posted by Daewood (Post 2167486)

Not meeting expectations - should it be that the fire episode is entirely to be blamed? Because otherwise the car has no other major vices from whatever I've heard or read.

And as Murthy said - was there 1.4L cancellations??

Quote:

Originally Posted by gautamkhadse (Post 2167232)

However if the Japanese come and sell us some load of crap with a label of "Q Class " on it , it is considered luxury and reliability in a budget and we make these assumptions even without having seen or driven the car.

Fully agree with you here. It goes like this.

If a Japanese car is ugly = Oh! Looks are subjective.

If a Japanese cars are underpowered = Who needs that much power on
Indian roads.

Need I say more? :)

Quote:

Originally Posted by mallumowgli

And as Murthy said - was there 1.4L cancellations??

One reason blamed for delay in showroom sales was having to first deliver to those who booked paying 95%. So, if 1.4L cancelled their bookings, this reason does not hold.

BTW, was it 2L bookings or 1L ? 60K cars on road means not even the initial bookings have translated to sales.

Regarding customers wanting more than an auto for less than the price of an auto, are the customers to blame for this expectation ? Or the manufacturer who announced that their car would be available at a price that happens to be less than what an auto costs ?

I think they can just downplay the 1L thing and position the car as a competitor to the M800/Alto - that way they can price it better and not have to work on a tight budget. Price the different models alongside the 800, 800DX, Alto, AltoLX & AltoLXi. That way it is no more a cheap car, but something that is on the lines of the current A-segment offerings.

P.S.: looks like Osamu Suzuki has been proven right when he said it is not possible to make a car at 1L. Just that he should not have shot off his mouth then, making it seem like the rant of an envious competitor.

Tata Motors has announced that it has completed the process to select the first 100,000 owners of the Tata Nano from among the 2,06,703 final list of applicants who had booked the car. As announced at the launch on March 23, the first 100,000 owners were selected through a computerised random selection process.

Tata nano booking, Tata nano draw complete - check your booking status - tata nano car, tatanano, tata nano lucky draw | India Summary

Murthy

Have been following this thread for a while now... my 2cents

The fact that 'Nano' managed so much attention much before the launch for the reasons (right or wrong) resulted in heightened expectations.
-Realistically speaking for the price what else can be expected (fire incidents, apart)

Its neither the noble cause or a product failure, if you look at it objectively there was/is a need for this product, cynics have already realised that it can be and is done. Like any product (esp. TATA with so much baggage) NANO will take a while to stabilize to get its footing right, also i think its early days yet to subject it to such extreme evaluation (majority have already written this off!)

Whatever, has to be done to get NANO back on track applies to most other offerings from the TATA Stable (Branding/Marketing/QS/A.S.S) and of-course the PR.
:deadhorse

If TATA's can do all the other thing right its will atleast get it back on track rest its for the product to bring in the customers...in due course of time:).

To me, a Car is a car. Nano looks like an Auto (should I blame the yellow color they advertised? chennai autos are yellow-themed) and for Rs.2 lakh OTR I can get a 6+ year old used ones like Santro, Palio, Zen, Alto, 800 etc.

The basic flaw is the increased OTR and cost of materials, pushing it to the entry level regular car segments. Plus, the 15 litre fuel tank which limits the range in potential buyers mind.

IMO, the Solution:
- Price Reduction
- Redesign, coz it is tall, narrow and resembles the bajaj auto from every angle.

Two changes I would need if I have to buy a Nano (which is very tempting for me):
- I hate those differently sized tyres. Whatever the engineering may be, this is ridiculous.
- I hate the sound of the engine. I'm not even talking about loud noise. I'm talking about some sort of garbage tempo engine sound, with thud-dud-dud-da-da-da----d. Even a single cylinder two wheeler engine is quieter. How could they make it so bad?