Positioning the Tata Nano (A) Sania Moazzam

Corporate Strategy Revolutionize Ultra low cost cars SEC C & D Product Development Improve life’s quality Develop hybrid & electric cars Conserve natural resources Acquisitions and Ventures Global presence

Market Invasion 2008 Jaguar and Land Rover – FMC $2.3 billion Global expansion Relatively decreased STILL 60% of all sales of all passengers and utility vehicle 2009 Dropped to 54%

Industry Facts 2009 > 11 million vehicles Average annual growth rate 17% Two-wheelers as % of all vehicles 76% Passenger vehicles as % of all vehicles 16%

Indica’s Longitudinal Performance

Case Facts Capacity limitation led to booking process Online booking service fee(Rs 200) Tata dealership booking service fee(Rs 300) Booking fee represented the majority of the final cost Contracting with entrepreneurial engineers Maruti 800 (the car for the Indian masses) The two wheeler segment posed tougher competition on the Nano Capacity limitation led to booking process Online booking service fee(Rs 200) Tata dealership booking service fee(Rs 300) Booking fee represented the majority of the final cost Contracting with entrepreneurial engineers Maruti 800 (the car for the Indian masses) The two wheeler segment posed tougher competition on the Nano

Qualitative Statements “A Tata company shall be committed to good corporate citizenship, not only in the compliance of all relevant laws and regulations but also by actively assisting in the improvement of quality of life of the people in the communities in which it operates. The company shall encourage volunteering by its employees and collaboration with community groups” Code of Conduct

Qualitative Statements Tata promise to improve the quality of life--- guided its product development Quality of life for women and children in India by supporting education and employment

Qualitative Statements TML Dealership “Such a figure- a million cars- has never been achieved in the country before. If it had to be done the conventional way, it would have meant investing many billions of dollars. So we looked at a new kind of distributed manufacturing, creating a low cost, low breakeven point manufacturing unit that we design and give to entrepreneurs who might like to establish a manufacturing facility”

Exhibit 1: Ad for the Tata Indica POSITIONING THE TATA NANO (A) KEL602

Exhibit 2: Top Competitors

Exhibit 3: Comparison of Nano Models

Exhibit 4: Comparison of Tata Nano and Maruti 800

Exhibit 5: Ad for Maruti Suzuki

Exhibit 6: Comparison of Tata Indica and Maruti Alto

Core Problem Improve Quality of Life Threat to environment Positioning

Core Problem - Introducing small, fuel efficient, low priced vehicles - Contributing to air pollution - Against the Tata Code of Conduct

Other Problems Conflict at Singur – Protests from farmers Initial plan of producing 350,000 Nanos – Limited to 50,000 Distribution of Nanos in rural areas – Hire entrepreneurial engineers – TML not confident for providing warranty Conflict at Singur – Protests from farmers Initial plan of producing 350,000 Nanos – Limited to 50,000 Distribution of Nanos in rural areas – Hire entrepreneurial engineers – TML not confident for providing warranty

Recommendations Focus on college students – grab market share – achieve competitive advantage Focus on college students – grab market share – achieve competitive advantage

Recommendations Market share of Tata Motors and Maruti Suzuki India are 16.45% and 46.07% respectively. – aggressive marketing Unable to assume responsibility for warranty or liabilities on cars assembled by independent groups. – intensive training to engineers – design a proper task force team for quality checks at different stages Market share of Tata Motors and Maruti Suzuki India are 16.45% and 46.07% respectively. – aggressive marketing Unable to assume responsibility for warranty or liabilities on cars assembled by independent groups. – intensive training to engineers – design a proper task force team for quality checks at different stages

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