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Marketing lessons from the Nano

April 2, 2009

It could turn out to be the next big liberator. In the next couple of years, the Tata Nano will probably do on the ground what Air Deccan did in the air. It will change forever the way families go shopping, visit friends or drop children to school.

'If you could position an all-weather car that is not a glorified scooter or a stripped-down car, then I believe there would be a market potential for one million cars a year,' Ratan Tata, chairman, Tata Group of companies, had said in an interview to The McKinsey Quarterly a few years ago when the Nano was being conceived.

That's exactly what the engineers at Tata Motors did. Challenging convention, they put the engine at the rear, fitted the petrol tank in the bonnet and opted for smaller front wheels.

More spacious than the Maruti 800 or the Maruti Alto, and with an engine life that's expected to last much longer than the 624 cc would have you believe, the Nano does pack in plenty of mileage, even if it doesn't quite make the '23 km to the litre' mark.

If the product was the first of its kind in the world, much of its appeal lay in its innovative pricing. At just Rs 100,000 (for the base version), the price point is more than affordable.

The lower-end models aren't expensive -- the Tata Nano Standard BSIII, for instance, can be bought for Rs 123,360 (ex-showroom, New Delhi). The upgraded variants too should not be out of the reach of the first-time car buyer, even after taking into account the cost of borrowing, tipped to be 11.5-12 per cent.

Text: Shobhana Subramaniam

Image: Tata Nano | Photograph: Courtesy Tata Motors

Also read: Buying a car? Great bargains available

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