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Consumer Psychology A Case Study on Tata Nano-Shamim Akhtar ICFAI MemberMizoram-Neeraj Athavale215112052

The automotive industry in indiaAutomobile industry flourished with an average growth rate of 17 percent annually post liberaliszationIn 2009 industry produced more than 11 million vehichles

Despite growth, per capita ownership of automobile is low compared to developed countries

Estimated 12 car owners per 1000 people, versus 765 per 1000 in US and 426 per 1000 in UK

Two wheelers dominate Indian market due to fuel efficiency , low purchase, and low maintenance cost

About 76 % of all vehicle sales in India are of 2 wheelers and remaining are passenger vehicleSegmentation of passenger vehicleSegmentDescriptionPrice rangeAEntry level hatchback(ex- Alto , maruti 800)Under 3.5 lakhsB1Hatchback(ex - Tata indica)3.5 to 6 lakhsB2Hatchback

6 to 7.5 lakhsC1SedanUnder 8 lakhsC2Sedan

8 to 9.5 lakhsD1Premium sedan

Under 15 lakhsD2Luxuty sedan

Under 25 lakhs

THE NANO

2007 Geneva auto show - worlds smallest and cheapest car and most fuel-efficient which would be known as peoples car at Rs. 1 lakh price.To reduce the costs associated with parts and manufacturing without compromising quality, Tata partnered with different suppliers including GKN Driveline India (driveshaft)The development of the NANOs engine i.e. two cylinder 624 cc ,was left to Tata motors 3 models : The Nano, The Nano CX and The Nano LX The Nano met Rest. 1 lakh goal by omitting many features like power steering, power window, ac etc. Whereas The Nano CX and The Nano LX offered more luxurious car at higher price

Distribution ChannelsA 17-day booking window, of which customers would be selected via lotteryBooking options :Online bookingTata DealershipOffline booking at SBI branches and various Tata storesDeposit payment mustPositioning of Nano2009In April 2009, out of the initial bookings of 2,03,000 Nanos, 1,00,000 were selected using lottery systemHalf bookings were for Nano LX, 30% for Nano CX and 20% for the basic NanoThe new Sanand plant provided a capacity of 2,50,000 units per yearOpen Sales through Tata Dealerships began from a single state in 20092010 onwards..Monthly sales grew peaking at 9,000 units per month in July 2010In November 2010, when the car sales grew 22%, sales of Nano plummeted to a mere 509 unitsThis was due to two causes:Rising safety issuesRising raw material costs

Fire fightingTata motors conducted an investigation. TML issued a statement that the fires were a result of foreign electrical equipment and not due to any safety issues in carTML took measures and improved the electrical system of the carTML also increased the 18 months warranty to 4 years or 60,000 KmsBy December, the sales rebounded to 5,784 units