Its much touted USP finally turned out to be the millstone around its neck

Reports have it that the peoples car which Tata Motors launched with much fanfare at the 2008 Delhi Auto Expo will now be consigned to the archives. This is a sad end to what could have been a potential game-changer in Indias automobile industry. When Rata Tata announced over a decade ago that his company was working on a 1-lakh peoples car, the world sat up and took notice. This kind of pricing was unheard of for a full-fledged automobile and even while there were sceptics such as Osamu Suzuki, chief of Suzuki Motor Corporation, the likes of Carlos Ghosn, CEO of Renault-Nissan, were visibly impressed. And Tata kept true to his word with the now immortal line at the Auto Expo: A promise is a promise when the 1-lakh price was announced for the base version. It was a heady moment for the then Tata Motors chairman who had, exactly a decade earlier, unveiled the Indica at the same venue to a rapturous audience. The Nano had taken the stakes to a new level with its astonishing price tag.

In retrospect, the cars USP of affordability would itself became a factor in its failure. The well-intentioned Tata who wanted to help middle-class families migrate to a car from a two-wheeler did not factor in their aspirations. Not for them a small box with four wheels that got them around the city. The aspirational middle-class car buyer desired bells and whistles to go with the basic functional features and there the Nano came unstuck. At its price point, the car could not obviously boast of features that even the next higher model did. With competitors flooding the market with affordable cars with all value-added features at only a slightly higher cost to the Nano, the fate of the car was sealed. It could be argued here though that the delay in the market entry of the car by more than a year due to the troubles at Singur proved crucial. With the Mamata Banerjee-led Trinamool Congress staging massive protests against the then Left governments decision to allocate fertile farmland at Singur, Tata Motors was forced to abandon its plans for a factory there that was to produce the Nano.Valuable time was lost and even while Tata Motors began producing small numbers of the Nano at its Pantnagar facility, the initial momentum had slowed down.

There was more trouble in store when stories began doing the rounds of Nanos catching fire. Suddenly, the peoples car did not look so alluring with people wondering if this was the fallout of a 1-lakh price tag, never mind that the top-end version actually cost nearly twice as much. Tata Motors did attempt to reposition the car steering clear of the cheap car tag but the damage had been done. When the history of Indias automobile industry is written, the Nano will have a special place for sure. It may have failed in the market for various reasons but it certainly showcased Indias frugal engineering prowess.

(This article was published on July 12, 2017)

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Excerpt from:

Ta-ta Nano - Hindu Business Line