Cambridge Journal of Regions, Economy and Society 2010, 3, 443–457 doi:10.1093/cjres/rsq009 Advance Access publication 1 April 2010

The Tata Nano, the global ‘value’ segment and the implications for the traditional automotive industry regions
Peter Wells
Cardiff Business School, Cardiff University, Aberconway Building, Colum Drive CF10 3EU, UK, wellspe@cardiff.ac.uk
Received on June 30, 2009; accepted on March 4, 2010
Downloaded from cjres.oxfordjournals.org at East China Normal University on May 24, 2011

This paper provides a case study of the Tata Nano, a low-price car designed primarily in and for the Indian market, and its implications for the developed industrial markets. While the Nano is a classic ‘disruptive’ innovation in an Indian context, this paper argues that the car and its emulators have the potential to undermine the viability of the European automotive industry whose business is premised on technological sophistication, premium branding and high price. In an era of greater austerity, the ‘value for money’ segment is the one with global growth potential in emergent markets as well. The paper concludes that policy makers in Europe will need to decide how to react to the rather different vision of automobility offered by the Nano. Keywords: Tata Nano, automotive industry, strategy, regional development, economic policy, price competition JEL Classifications: F01, L11, L52, L62

Introduction
In March 2009, the Indian company Tata launched the long-awaited Nano model, intended to provide a low-cost entry to automobility as an alternative to the motorbike and hence become a ‘peoples car’ for the emerging markets. While initially planned for India, the underlying thinking behind the Nano was one of least-cost engineering minimalism (Connell, 2009) that has re-ignited global automotive industry interest in what might be termed the ‘value for