1. Executive Summary
India is the sixth largest passenger vehicle manufacturer in the world (Wikipedia Automobile industry). With a population of over 1.2 billion people, India has a huge market potential for automobiles. In the Indian Automobile Industry, India has become a leading center in producing small cars.
In the year 2006, Ratan Tata of Tata Motors conceived the idea of a tiny car at an extremely cheap price to capture the potential of the rapidly growing middle class segment. The outcome was the Tata Nano, the world’s cheapest car priced at one lakh INR. Rolled out from Tata Motors as the world’s cheapest car in the year 2009, the indigenous Tata Nano achieved immediate success, fulfilling its promises of a complete car at an affordable price for the middle class masses.
The Tata’s had relied rather heavily on the publicity of their product. But rather than leveraging this publicity, Tata became complacent about the communication strategy. The USP of the product, the “cheapest” price tag, had backfired miserably, and actually shunned its sales. The status conscious customer obviously did not want to get associated with the tag of “Poor man’s car”, and would rather opt for slightly pricier rival options. Hence, instead of being perceived as a functional step above the motorcycle as it was intended to be, the Tata Nano started being largely perceived as a cut-price car.
The Tata Nano was initially conceived as a safe personal mobility alternative to the huge section of the Indian two wheeler riding population, at an equally competitive price. But the safety of the car came under intense criticism when quite a few of the cars caught fire in their early days. This was followed by a call from Tata Motors to its existing customers to install safety devices in their cars. The security failure of Tata Nano completely shattered the trust of the customers in the