Tata Nano

Is there a future for Tata Nano – A case Study

Case Facts :

While the then largest selling car company was planning all its strategies to discontinue their lowest price car Maruti 800 and make Alto the lowest in their portfolio, there was another company, stretching its engineering proves to produce the cheapest car in the world. Termed as an engineering marvel by many, the project almost became a showcase project for Tata. That was the time more foreign brands were entering the Indian market with much higher priced cars. The market was also showing a favourable shift towards mid segment sedans. The Nano project made many companies like Bajaj quickly work strategies on low priced car, as they felt they should have been the one to launch this product in India as a natural transition from being one of the larger two wheeler manufacturer.

The passenger car market in India:

The production of passenger vehicles in India was recorded at 3.23 million in 2012-13 and is expected to grow at a compound annual growth rate (CAGR) of 13 per cent during 2012-2021, as per data published by Automotive Component Manufacturers Association of India (ACMA). Passenger car sales stood at 1.89 million units in 2012-13. 

A basic classification of the market would be 1. Hatchbacks 2. Sedan 3. SUVs. Recently the classification has become a lot more fluid as newly launched models are starting to incorporate aspects of two or more segments; these are called crossovers. This trend is in line with more advanced markets where crossovers are extremely popular.

The Indian market continues to be dominated by hatch-backs. Though within this, the mini-car segment (800cc or lower) has receded in importance. Currently, the mini car segment (800cc or lower) makes up for 21% of the market.

Maruti’s brands continue to be the leaders with the top three slots being held by Alto, Swift and Dzire in the year 2012-13. The table below will give idea of the current market shares of various...