Monday, 14 January, 2008

Tata Nano: Why it won’t succeed

        Wow !! A car for just 1 lakh!! The Tatas believe it will be successful, since the potential market numbers in millions. But the, the same is true of a 35k motorbike as well. All those low-end motorcycles have failed miserably. Bajaj CT100 is probably the only exception. It failed to attract consumers after the initial euphoria. So, does the ‘cheap’ car really sell? I don’t think so.

        As Amitabh Bachcan says in the “India Poised” campaign, “there are two Indias”. One India is of the past, which was not only cost-sensitive but was seen as low cost business provider by the world. There’s another India, which is very successful, delivers the best quality of products and expects to consume the same. “The first India is dying, with more and more of its population crossing over to the new India” says Amitabh. It is this India That I expect to reject the new car. This India is keen on ‘Nano’technology, not interested in the old ‘iPod Nano’ or the new ‘Tata Nano’.

        If the economic superbia is not enough reason, consider Tata’s history. The first version of any of its cars – be it Safari, Indica, Indigo etc – have not been successful. When Indica was launched ten years ago, it couldn’t compete with ordinary cars like Santro and Matiz. It later made a resounding comeback – ala Ganguly – so much so, I compelled my father to buy Indica and nothing else!!

        That’s not all that history tells you. It also tells you that Tata Motors do not have any credible petrol engine product. The success of Indica has been driven by its diesel models, a popular choice for taxi operators. Tata Motors claim (on their website) to have 4 million vehicles running on Indian roads, but ask them how many of these are petrol vehicles (around 10%, that’s my estimate) and the answer wouldn’t surprise me.

        Despite such opinions, I have no doubt that the initial craze may create a large short-term demand for the car. Sooner or later, I will also buy the car, irrespective of public perception and quality, for it’s the most stylish car (from the pictures) since Maruti Zen.

        I adore the Tata group for following the fairest business practices. They have been striving hard to build a new India. I would be happy if my prediction goes wrong.

1 comment:

  1. there is two things here..
    with the fuel prices sky rocketing, the market for a small car will go up..
    ad also the nano will make for an ideal second car even in affluent India. Sa you have a largish family car, it is not fuel efficient to say drive it everyday to work, it makes a ton of sense to have a smaller inexpensive andmore fuel efficient car.. This may still redem the nano.
    BTW, brilliant blog