It was touted as the Rs 1-lakh car that would set the market afire. Nothing of that sort happened and the car’s monthly sales have ended up becoming embarrassing statistics.
On Wednesday, Cyrus Mistry, Chairman of Tata Motors, said at the company’s annual general meeting that the Nano would now be repositioned as a smart city car. This would mean added features such as power steering and better interiors.
Will this make a difference to the “people’s car”, which promised the moon when it was unveiled at the 2008 Delhi Auto Expo? The response at its launch a year later has petered to a couple of thousand units sold each month.
Critics of the Nano reiterate that it lost its way because it was perceived as a cheap product. According to them, car buyers in India give greater priority to mileage and design. By the end of the day, a car confers on its owner a certain standing in his/her community, which the Nano, with its price tag, was just unable to do. Mistry is aware of this and keen to take the car to a higher level. The idea is, perhaps, to divest it of its cheap-car tag (the top-end Nano is slightly over Rs 2 lakh) and take it closer to the space of the Suzuki Alto and Hyundai Eon. Both models have starting prices closer to Rs 3 lakh and do combined monthly sales of nearly 30,000 units.
The downside to the Nano is its brand image, which has taken a beating over the last four years. It will be a tough challenge for Tata Motors to reach young customers. There will also be pressure from companies such as Nissan, which will launch its competitively priced Datsun brand in India next year.
Is it, therefore, a case of too little, too late for the Nano? Not quite, insist its supporters. After all, past experience has shown that Indian consumers are willing to give any company a second chance so long as a product fits their requirements. Fiat Auto is a case in point. It frittered an opportunity with the Uno 15 years ago and lost its way briefly thereafter. However, when it launched the Palio in 2002, the market loved what it saw and the response was phenomenal. Fiat, however, could not capitalise on this wave for a host of reasons and is now working on its comeback script for India.
The big difference today is that buyers are better informed and more demanding. The new Nano needs to offer something special that can do the trick. A diesel option may have been relevant a year ago but the fuel has since become dearer and customers are again making a beeline for petrol vehicles.
For a car that grabbed headlines across the world not so long ago, the Nano has ended up being an unfortunate journey for Tata Motors. The problems began with the original facility in West Bengal and the eventual decision to relocate to Gujarat. The time lost coupled with a lacklustre marketing strategy only made things worse for the Nano. It deserves better.