Tata Nano: the People's Car
9-710-420
REV: JUNE 3, 2010
KRISHNA PALEPU BHARAT ANAND RACHNA TAHILYANI
Tat Nano – The Peopl Car ta o e le’s r dia k big. Ind must think small to stay b — Ra atan Tata, Cha airman Tata G Group In March 2009, Tata Motors India’s larg , s, gest automob company by sales lau bile unched the world’s cheap pest car, the Tata Nano i India price at $2500 (see Exhibit 1 for a pict in ed ture of the N Nano). Throu ugh this laun nch, the comp pany realized Tata Group Chairman R d Ratan Tata’s v vision of mak king a “peop ple’s car” - a safe, affordab car which was within everyone’s r ble h reach. Ratan T Tata’s overar rching ambit tion was to build innova b ative product for the ma ts asses. He exp plained, “The aim is to c e create produ for that la ucts arger segmen nt—good and robust produ that we a able to pro ucts are oduce innovatively and g to the ma get arketplace at lower costs.”1 The next c ” cheapest car a available in t world wa the the as Chine QQ3 at $5 ese 5,000 manufac ctured by Che Automobi ery ile. By targeting th two-wheele vehicle ow y he ed wners, Nano created a new segment – the ultra low cost w w (ULC) segment pr riced between two-wheeled vehicles an the Maruti Suzuki 800, the next che n nd , eapest car in India. The Nano was a resounding suc n N ccess, and by May 2009, Ta Motors ha received 20 ata ad 06,000 orders for it. How wever, Tata M Motors was p producing Na ano from the interim fa eir acility that ha an ad annua capacity of 50,000. Their new plant, w al f r which would start comme d ercial product tion by April 2010, would have at best an annual ca d t apacity of 350 0,000. Ra Kant, Vic Chairman of Tata Mo avi ce n otors, wonde ered what w would be the optimal cap pacity comm mitment for th Nano. The overwhelming positive m he e market response to Nano suggested th the hat company’s interna estimates o the market demand for Nano-like v al of t r vehicles in India was close to a e on y in of cess, global automakers su as uch millio
REV: JUNE 3, 2010
KRISHNA PALEPU BHARAT ANAND RACHNA TAHILYANI
Tat Nano – The Peopl Car ta o e le’s r dia k big. Ind must think small to stay b — Ra atan Tata, Cha airman Tata G Group In March 2009, Tata Motors India’s larg , s, gest automob company by sales lau bile unched the world’s cheap pest car, the Tata Nano i India price at $2500 (see Exhibit 1 for a pict in ed ture of the N Nano). Throu ugh this laun nch, the comp pany realized Tata Group Chairman R d Ratan Tata’s v vision of mak king a “peop ple’s car” - a safe, affordab car which was within everyone’s r ble h reach. Ratan T Tata’s overar rching ambit tion was to build innova b ative product for the ma ts asses. He exp plained, “The aim is to c e create produ for that la ucts arger segmen nt—good and robust produ that we a able to pro ucts are oduce innovatively and g to the ma get arketplace at lower costs.”1 The next c ” cheapest car a available in t world wa the the as Chine QQ3 at $5 ese 5,000 manufac ctured by Che Automobi ery ile. By targeting th two-wheele vehicle ow y he ed wners, Nano created a new segment – the ultra low cost w w (ULC) segment pr riced between two-wheeled vehicles an the Maruti Suzuki 800, the next che n nd , eapest car in India. The Nano was a resounding suc n N ccess, and by May 2009, Ta Motors ha received 20 ata ad 06,000 orders for it. How wever, Tata M Motors was p producing Na ano from the interim fa eir acility that ha an ad annua capacity of 50,000. Their new plant, w al f r which would start comme d ercial product tion by April 2010, would have at best an annual ca d t apacity of 350 0,000. Ra Kant, Vic Chairman of Tata Mo avi ce n otors, wonde ered what w would be the optimal cap pacity comm mitment for th Nano. The overwhelming positive m he e market response to Nano suggested th the hat company’s interna estimates o the market demand for Nano-like v al of t r vehicles in India was close to a e on y in of cess, global automakers su as uch millio