CONTEMPORARY ISSUESA report on

TATA NANO -the people’s car

About Tata Group

Mr. Ratan Tata is the chairman of the TATA companyMr. Ratan Tata is the chairman of the TATA company The business operations of the Tata group -The business operations of the Tata group -

communications and information technology, communications and information technology, engineering, materials, services, energy, consumer engineering, materials, services, energy, consumer products and chemicalsproducts and chemicals..

The major companies-Tata Steel, Tata Motors, Tata The major companies-Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power, Tata Consultancy Services (TCS), Tata Power, Tata Chemicals, Tata Tea, Indian Hotels and Tata Chemicals, Tata Tea, Indian Hotels and Tata Communications Communications

Tata group provides IT solutions and services to Tata group provides IT solutions and services to customers worldwide -systems integration, hardware customers worldwide -systems integration, hardware manufacturing and educational services. manufacturing and educational services.

INDIA for over 130 yearsINDIA for over 130 years

TATA MOTORSTATA MOTORS

Tata Motors Limited is India's largest automobile Tata Motors Limited is India's largest automobile company, with revenues of Rs. 32,426 crores (USD 7.2 company, with revenues of Rs. 32,426 crores (USD 7.2 billion) in 2006-07.billion) in 2006-07.

It is the leader by commercial vehicles in each It is the leader by commercial vehicles in each segment.segment.

The company is the world's fifth M&HCV manufacturer, The company is the world's fifth M&HCV manufacturer, and the world's second largest medium and heavy bus and the world's second largest medium and heavy bus manufacturer.manufacturer.

Annual turnover of over Rs 108 billion.Annual turnover of over Rs 108 billion. The company has manufacturing plants at The company has manufacturing plants at

Jamshedpur, Pune and Lucknow, Bangalore, Chennai, Jamshedpur, Pune and Lucknow, Bangalore, Chennai, Noida, Uttaranchal & Singur, & have many more Noida, Uttaranchal & Singur, & have many more manufacturing & R&D units abroad.manufacturing & R&D units abroad.

Focusing on new technologies and innovation to drive Focusing on new technologies and innovation to drive its business in India and internationally- its business in India and internationally- The Nano The Nano carcar . .

An idea can change your LIFE

An idea can change your WIFE

An idea can also change OTHERS life

SEEDS OF THE DREAMSEEDS OF THE DREAM

Mr. Ratan Tata said, Mr. Ratan Tata said,

“ “I observed families I observed families riding on two-wheeler riding on two-wheeler the father driving the the father driving the scooter, his young kid scooter, his young kid standing in front of him, standing in front of him, his wife seated behind his wife seated behind him holding a little him holding a little baby. It led me to baby. It led me to wonder for such a car wonder for such a car which is safe & which is safe & affordable to any middle affordable to any middle class family.” class family.”

MAKING OF TATA NANOMAKING OF TATA NANO

““NANONANO" is often used to mean small. " is often used to mean small. Tata Motors commercially launched Nano on Tata Motors commercially launched Nano on

March 23, 2009, with bookings from April 9 to March 23, 2009, with bookings from April 9 to April 25.The sales of the car will begin in July April 25.The sales of the car will begin in July 2009, with a starting price of Rs 115,000, 2009, with a starting price of Rs 115,000, cheaper than the Maruti 800.cheaper than the Maruti 800.

The car is expected to boost the Indian The car is expected to boost the Indian economy, create entrepreneurial-economy, create entrepreneurial-opportunities across India, as well as expand opportunities across India, as well as expand the Indian car market by 65%. the Indian car market by 65%.

Described as an eco-friendly "people's car". Described as an eco-friendly "people's car".

OVERVIEWOVERVIEW

Nano received media attention due to its Nano received media attention due to its targeted low price. targeted low price.

The The Tata NanoTata Nano is a is a rear-engine, four- four-passengerpassenger , ,city car built by built by Tata Motors,

It was first presented at the 9th annual Auto It was first presented at the 9th annual Auto Expo on 10 January 2008, at Pragati Maidan Expo on 10 January 2008, at Pragati Maidan in New Delhi, India.in New Delhi, India.

From Singur to Pantnagar (Uttakrkhand) From Singur to Pantnagar (Uttakrkhand) Aimed primarily at the Indian market. Aimed primarily at the Indian market.

DEAL OF TATA NANODEAL OF TATA NANO

A loan of Rs. 9750 Crore at 0.1% simple A loan of Rs. 9750 Crore at 0.1% simple rate of interest.rate of interest.

Repayment of this loan @ 0.1% over 20 Repayment of this loan @ 0.1% over 20 years.years.

They got 100% exemption on electricity They got 100% exemption on electricity duty. duty.

The 1100 Crores’ Land has been given with The 1100 Crores’ Land has been given with high subsidies without any stamp duty high subsidies without any stamp duty registration and transfer charges.registration and transfer charges.

The payment for land would be made in The payment for land would be made in eight equal annual instalment at a eight equal annual instalment at a compound interest of 8% p.acompound interest of 8% p.a

TARGET MARKETTARGET MARKET

The low-cost car is The low-cost car is clearly intended for the clearly intended for the massesmasses. .

For the family of four that would otherwise For the family of four that would otherwise ride on a scooter,ride on a scooter,

Its also attracts the small cars buyers like Its also attracts the small cars buyers like Maruti 800, bike riders etc.Maruti 800, bike riders etc.

FEATURES OF TATA NANOFEATURES OF TATA NANOLengthLength 3.1 metres3.1 metres

WidthWidth 1.5 metres1.5 metres

HeightHeight 1.6 meters1.6 meters

EngineEngine All-aluminium, Rear Mounted, Rear Wheel DriveAll-aluminium, Rear Mounted, Rear Wheel Drive

CapacityCapacity 623 cc623 cc

PowerPower 33 PS33 PS

Fuel InjectionFuel Injection Multi Point Fuel Injection (MPFI)Multi Point Fuel Injection (MPFI)

Fuel TypeFuel Type Petrol, Diesel Version will be laterPetrol, Diesel Version will be later

Body TypeBody Type Sheet MetalSheet Metal

Seating CapacitySeating Capacity 04 (Four)04 (Four)

MileageMileage

20-22 Kmpl (City drive)20-22 Kmpl (City drive)

26 Kmpl (Highways) 26 Kmpl (Highways)

Top SpeedTop Speed 75 K.M75 K.M

Emission NormsEmission Norms Euro-IV, Bharat Stage-III compliantEuro-IV, Bharat Stage-III compliant

Safety NormsSafety Norms Frontal Crash TestedFrontal Crash Tested

VersionsVersions One Standard and Two DeluxeOne Standard and Two Deluxe

MODEL VERSIONSMODEL VERSIONS

Basic Tata Nano Std priced at 1,23,000 Basic Tata Nano Std priced at 1,23,000 Rupees Rupees

Deluxe Tata Nano CX at 1,51,000 Rupees has Deluxe Tata Nano CX at 1,51,000 Rupees has air conditioning; air conditioning;

Luxury Tata Nano LX at 1,72,000 Rupees has Luxury Tata Nano LX at 1,72,000 Rupees has air conditioning, power windows and central air conditioning, power windows and central locking locking

TECHNICAL SPECIFICATIONS

According to Tata Group’s Chairman Rata Tata, the According to Tata Group’s Chairman Rata Tata, the Nano is a :Nano is a :

33 PSI (33 hp/24 kW) car with a 33 PSI (33 hp/24 kW) car with a 623 cc rear engine and rear wheel drive, and has a 623 cc rear engine and rear wheel drive, and has a fuel economy of 4.55 L/100 km (21.97 km/L, 51.7 fuel economy of 4.55 L/100 km (21.97 km/L, 51.7

mpg (US), 62 mpg (UK)) under city road conditions, mpg (US), 62 mpg (UK)) under city road conditions, and 3.85 L/100 km on highways ( 25.974 km/L, 61.1 and 3.85 L/100 km on highways ( 25.974 km/L, 61.1 mpg (US), 73.3 mpg (UK)). mpg (US), 73.3 mpg (UK)).

It is the first time a two-cylinder non-opposed petrol It is the first time a two-cylinder non-opposed petrol engine will be used in a car with a single balance engine will be used in a car with a single balance shaft. shaft.

Compressed engine.Compressed engine. Eco-friendly models and initiatives.Eco-friendly models and initiatives. Electric VersionElectric Version

COST CUTTING FEATURES

The Nano's boot does not open, instead the rear The Nano's boot does not open, instead the rear seats can be folded down to access the boot space.seats can be folded down to access the boot space.

It has a single windscreen wiper instead of the It has a single windscreen wiper instead of the usual pair. usual pair.

Some exterior parts of it are glued together, rather Some exterior parts of it are glued together, rather than welded. than welded.

It has no power steering. It has no power steering. Its door opening lever was simplified.Its door opening lever was simplified. It has 3 nuts on the wheels instead of the statutory It has 3 nuts on the wheels instead of the statutory

4 nuts. 4 nuts. It only has 1 side view mirrorIt only has 1 side view mirror

SUPPLIERS TO TATA NANO

1.1. Bosch 8. Freudenburg Bosch 8. Freudenburg

2. Caparo 9. GKN2. Caparo 9. GKN

3. Continental 10. Itw Deltar3. Continental 10. Itw Deltar

4. Delphi 11. INA 4. Delphi 11. INA

5. Denso 12. Johnson Controls5. Denso 12. Johnson Controls

6. Fag 13. Mahle6. Fag 13. Mahle

7. Ficosa 14. Saint gobain7. Ficosa 14. Saint gobain

SUPPLIERS TO TATA NANO

A German based automotive company. It supplies Gasoline injection system, Starter.

A Europe based company. It supplies Inner structural panels.

It supplies Rear-view mirrors, interior mirrors, manual and CVT shifters, washer system

An American corporation. It supplies break systems.

U.S based company. It supplies seating systems.

Europe based company. It supplies fuel level sensor, gasoline fuel supply system.

Issues & Controversies

Tata's planned manufacturing unit for the car in Singur, West Bengal, where the state government of West Bengal has allocated 997 acres (4.03km²) to Tata Motors

Required fertile agricultural land and the expropriation and eviction of 15,000 peasants and agricultural workers.

September 2,2008 Tata Motors announced that they have suspended work at Singur.

On October 2 ,2008 Tata Motors announced that they are pulling out of Singur.

On Oct. 7 2008, it was announced that the Chief Minister of Gujarat, Narendra Modi had signed an MOU -for allocating land for in Sanand in Ahmedabad district of Gujarat.

TATA NANO VIEWED -PROCESS FOR NEW PRODUCT DEVELOPMENT

Idea GenerationIdea Generation Idea ScreeningIdea Screening Business AnalysisBusiness Analysis DevelopmentDevelopment Test MarketingTest Marketing CommercializationCommercialization Concept TestingConcept Testing

Idea Screening

Will the customer in the target market benefit from the product?

What is the size and growth forecasts of the market segment/target market?

What is the current or expected competitive pressure for the product idea?

What are the industry sales and market trends the product idea is based on?

Is it technically feasible to manufacture the product?

Will the product be profitable when manufactured and delivered to the customer at the target price?

Concept Development and Testing Develop the marketing and engineering details Develop the marketing and engineering details

Who is the target market and who is the Who is the target market and who is the decision maker in the purchasing process? decision maker in the purchasing process?

What product features must the product What product features must the product incorporate? incorporate?

What benefits will the product provide? What benefits will the product provide? How will consumers react to the product? How will consumers react to the product? How will the product be produced most How will the product be produced most

cost effectively? cost effectively? Prove feasibility through virtual computer Prove feasibility through virtual computer

aided rendering, and rapid prototyping.aided rendering, and rapid prototyping. Testing the Concept by asking a sample of

prospective customers what they think of the idea- Choice Modelling.

Business Analysis

Estimate likely selling price based upon competition and customer feedback

Estimate the cost of the project Estimate profitability and breakeven point

Beta Testing and Market Testing

Produce a physical prototype or mock-up Test the product (and its packaging) in

typical usage situations Conduct focus group customer interviews

or introduce at trade show Make adjustments where necessary Produce an initial run of the product and

sell it in a test market area to determine customer acceptance

Technical Implementation

Resource estimation Engineering operations planning Department scheduling Supplier collaboration Logistics plan Resource plan publication Program review and monitoring Contingencies

Commercialization

Launch the product Produce and place advertisements and

other promotions Fill the distribution pipeline with product

IMPACT OF INFLATION

Introducing the car with an artificially low price Introducing the car with an artificially low price through government subsidies and tax-breaksthrough government subsidies and tax-breaks

Forgoing profit on the carForgoing profit on the car Using vertical-integration to artificially boost Using vertical-integration to artificially boost

profits on cars at the expense of their profits on cars at the expense of their materials industriesmaterials industries

Partially using inexpensive polymers or Partially using inexpensive polymers or biodegradable plastics instead of a full metal-biodegradable plastics instead of a full metal-bodybody

Raising the price of the carRaising the price of the car

TATA NANO IN RELATION TO THE MARKETING MIX

Product Mix- product features, design etc. product features, design etc. Branding Strategies- umbrella branding

strategies small size,small price small income group, small family

Pricing strategies- Penetration pricing, Low pricing policy with minimum profit margin.

Promotional Activities- Publicity as “One lakh car” ,Auto expo 2008,New Delhi & Geneva, print & electronic media, Singur violation

SOCIAL IMPACT OF TATA NANO

Living standard up gradationLiving standard up gradation Increased safetyIncreased safety 1 million cars per year1 million cars per year Inadequate infrastructureInadequate infrastructure Traffic congestionTraffic congestion Parking problemParking problem Price hike in real estate.Price hike in real estate. ARE WE REALLY PREPARED ARE WE REALLY PREPARED

FOR IT ?FOR IT ?

ECONOMICAL IMPACT

Boom in the banking and financial sector Competitive advantage Mass Selling and production Employment Energy security issue

ENVIRONMENTAL &TECHNICAL IMPACT

PollutionPollution Global warmingGlobal warming Petroleum scarcityPetroleum scarcity Non-biodegradable wasteNon-biodegradable waste CAN WE AFFORD THIS DISASTERCAN WE AFFORD THIS DISASTER

Automobile revolutionAutomobile revolution Mass productionMass production Safety will be compromisedSafety will be compromised R&D for low cost editionsR&D for low cost editions

SWOT ANALYSIS

STRENGTHS: STRENGTHS: Low Price & stylish High fuel effeciency Brand name, First innovation 35 Patents for innovation Environmental friendly- Green House Effect Variometric Gear System- Magnifies Torque Tested successfully for crumple zones

WeaknessesWeaknesses

Fiber body, Low suspension power, Low engine capacity, Light vehicle, Not suitable fir hilly areas Less Boot space Poor engine cooling & hence over heating No headlight levelers No modern facilities- ABS, PS, AC

OpportunitiesOpportunities

Bikers can be motivatedBikers can be motivated Created a Niche MarketCreated a Niche Market Creates EmploymentCreates Employment Auto FinanceAuto Finance Diesel & Electric VariantDiesel & Electric Variant Developing Low Price Engine OilDeveloping Low Price Engine Oil

ThreatsThreats

New Competitor- Bajaj, Honda Siel, GM etc.New Competitor- Bajaj, Honda Siel, GM etc. REVA an electric carREVA an electric car Traffic CongestionTraffic Congestion Government may increase taxes in metrosGovernment may increase taxes in metros Rising cost of raw materialRising cost of raw material Reducing parking spaceReducing parking space

Challenges to Tata Nano

Political issues in Gujarat.Political issues in Gujarat. Fuel price hikes is the most important challenge Fuel price hikes is the most important challenge

for Nano.for Nano. Increase in material cost like steel and tires.Increase in material cost like steel and tires.

Effect on Indian EconomyEffect on Indian Economy

Expand the Indian car market by 65%, according to rating agency CRISIL.

The low price makes the car affordable for families with incomes of Rs 1 lakh [1,00,000] per annum

The increase in the market is expected to push up car sales by 20% over the previous year. “

Thus, the Indian Economy is expected to remain strong and grow in 2009

TATA Nano Show Room

FUTURE OF TATA NANO

"Dream-dream and dream, because dream gives vision, vision gives thoughts and finally thoughts lead to the action“-India's former President Dr. A.P.J. Abdul Kalam

Ratan Tata 2003, dreamt of producing a safe, affordable Car for the common man

NANO definitely helps to come true for Middle Man’s DreamIt truly proved to be the cheapest car of the industry

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BibliographyBibliography

www.tatamotors.comwww.tatamotors.com www.tatanano.comwww.tatanano.com www.economictimes.comwww.economictimes.com Business StandardBusiness Standard Times of IndiaTimes of India