The Tata Nano might soon be killed and here's why - The Financial Express

The Tata Nano might soon be killed and here’s why

The future of Tata Nano seems uncertain as Tata Motors pursues a new growth strategy. We explain why and what went wrong for the Nano through its journey.

By: | Updated: February 7, 2017 10:48 AM

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As Tata Motors tries to gear up for the future with its new performance sub-brand TAMO, it seems the Nano may be running out of the road for survival. Going forward, Tata Motors aims to have just two platforms instead of the present six, allowing for a more streamlined operation. Unfortunately, none of these platforms presently underpin the Nano. One of these platforms is the Advanced Modular Platform (AMP), which will be capable of spawning vehicles ranging from hatchbacks to sports cars. The other platform is expected to be a derivative of a Land Rover platform, which will primarily take care of the SUV/ MUV products.

Since both platforms are modular, most critical parts will remain same for multiple vehicles, resulting in lesser cost and time for development. A lesser number of modular platforms is the way ahead for global vehicle makers but the Nano is based on a different platform, which isn't part of the two discussed platforms. Having a Nano in future would mean developing an all-new one based on the AMP, which doesn't make financial sense for the company. Hence, considering the low-sales of the Nano and the new strategy of Tata Motors, it seems the Nano, along with Ratan Tata's dream is nearing the end.

So, what went wrong for such a global star? Allow us to explain.

Launched in 2008, as the dream project of Ratan Tata, the Nano quickly went on to become a global attraction even before its launch. Despite being a well-engineered car and actually better than the earlier models of Tata Motors, the Nano failed to turn the face of mobility in India. The problem lay in the way it was marketed initially and the inability of the company to turn that around. Today, the Nano sells under 1,000 units on an average, which for a mass-market carmaker isn't a good number.

While popularity in India was due to the expected price of Rs 1 lakh, international companies were curious to know how did it become possible to make a proper car for such a small amount.

Unfortunately, while Tata Motors seemed happy to bask in the sunshine of Nano’s increasing popularity, it didn’t notice that simultaneously the Nano was also becoming a synonym for ‘cheap’. In a young and aspirational economy such as India, this wasn’t the right recipe for success. Launched to the global audience, the Nano seemed to start off well but soon things started to go awry. While things had gone bad earlier with the plant in West Bengal earlier, this time the problem was the lack of consumer willingness to buy the Nano. Soon after its launch, some cases of the car catching fire only worsened things further. Soon, plagued by fire and quality issues and its perception of being the cheapest car around, very few people wanted to buy a Nano.

Now there wasn't actually any fundamental engineering or technical problem in the Nano and the car was actually more spacious than its immediate yet more expensive competitor, the Maruti Suzuki 800. The Nano was also safer than the competition but the company was unable to turn around the perception. Over the course of the next few years, Tata Motors rolled out multiple upgrades and new variants of the Nano with newer and better features and technologies. The marketing campaign too was aimed at the youth by pitching the Nano as a funky and convenient car. Later the company also added features such as power steering, Bluetooth audio and an Automated Manual Transmission (AMT) too, making it the most affordable automatic car in the country.

Also Read: From Nano to a sportscar, Tata Motors’ TaMo will have a huge perception gap to bridge

However, all these measures and a well-engineered product failed to capture the customers' imagination. While it was earlier thought that people from two-wheelers will upgrade to the Nano in favour of safety and convenience, the addition of features meant that most people couldn't think of such an upgrade. The targeted youth too didn't want to buy the car, probably because they didn't want to be seen driving around in the cheapest car. I personally know people who liked the Nano but went ahead and bought a used Maruti Suzuki Alto instead because for some being seen in the cheapest car was not a cool thing in the college.

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