Tata NANO Case Study
Timothy May
Global Business
Dr. Mona Bahl
Tata Nano
1. How would you segment the Indian automobile industry? Where will Nano have the best appeal?
The automobile market in India shows that two-wheelers and three-wheelers in India vastly outsell four-wheeled cars. The graph below shows a good representation of how the market was segmented during the time of the case. This makes it easy to see that most mobile persons were buying motorbikes, scooters, and things of that sort. A subdivision of the market can separate the car segment into passenger and commercial segments. It is the passenger segment on which Tata can capitalize. Many motorbike travelers can and do carry a passenger on the back of their bike. Like it is said in the case, if Tata can convert some of these two-wheeled riders by providing more comfort and safety for the price, Tata can capture a decent amount of the passenger car segment.
2. Will Tata be able to ensure quality and consistency? How important is car quality for the Nano? How important is service? Tata held quality in a very high regard. They set specific quality assurance standards for all of their partners and affiliates making parts for them. Also, Tata believed that there was much built-in value in the design of the Nano because it was a project that was brand new and had to be reverse engineered to make up the cost savings necessary to hit the price point Tata planned on providing to consumers. Tata is big enough and has enough market share to be able to be concerned about quality and consistency. Tata employed the idea of the Nano being a “kit” car and having Indian entrepreneurs assemble and sell the cars to the public. These assembly operations would be trained by Tata corporate to stay up to the quality specifications set by the company. Service is also a very important component in the car industry in general and is a vital part of the industry’s value chain. Met with the concerns about the overall service aspect of their
Global Business
Dr. Mona Bahl
Tata Nano
1. How would you segment the Indian automobile industry? Where will Nano have the best appeal?
The automobile market in India shows that two-wheelers and three-wheelers in India vastly outsell four-wheeled cars. The graph below shows a good representation of how the market was segmented during the time of the case. This makes it easy to see that most mobile persons were buying motorbikes, scooters, and things of that sort. A subdivision of the market can separate the car segment into passenger and commercial segments. It is the passenger segment on which Tata can capitalize. Many motorbike travelers can and do carry a passenger on the back of their bike. Like it is said in the case, if Tata can convert some of these two-wheeled riders by providing more comfort and safety for the price, Tata can capture a decent amount of the passenger car segment.
2. Will Tata be able to ensure quality and consistency? How important is car quality for the Nano? How important is service? Tata held quality in a very high regard. They set specific quality assurance standards for all of their partners and affiliates making parts for them. Also, Tata believed that there was much built-in value in the design of the Nano because it was a project that was brand new and had to be reverse engineered to make up the cost savings necessary to hit the price point Tata planned on providing to consumers. Tata is big enough and has enough market share to be able to be concerned about quality and consistency. Tata employed the idea of the Nano being a “kit” car and having Indian entrepreneurs assemble and sell the cars to the public. These assembly operations would be trained by Tata corporate to stay up to the quality specifications set by the company. Service is also a very important component in the car industry in general and is a vital part of the industry’s value chain. Met with the concerns about the overall service aspect of their