Three reasons that may have brought the Nano down
In the words of the managing director (ex., has since stepped down) and group executive at Tata Motors, Carl Peter-Forster, “We have a very satisfied set of customers owning the Nano which means there is nothing wrong with the product. So now the positive word of mouth of the car will spread and that is how we are anticipating growth in sales from here on.”
So it now depends on just word of mouth mode of publicity for the Nano from here onwards, given the fact that Tata Motors have tried every sales trick in the hat which included attractive and low interest finance schemes after a zero down payment as also opening up dedicated kiosks all over the country advertising the Nano car.
Nano has now been there for over a year and has found almost a lakh buyers. After such a long inning, that Forster is still pinning his hopes on the word of mouth method can well be considered quite a farfetched thinking.
Business Standard reports, “Nano sales last month dipped to 3,260 units, down by 64 per cent as against 9,000 units’ recorded same month last year. Over the previous two months Nano sales have nearly halved to 8,712 units as against 16,704 recorded in the corresponding two months previous year. Tata Motors slashed production of the small car by 31 per cent during the past two months as the company did not have too many takers of the car following stocks of the Nano lying unsold with dealers.”
The reasons for the apple cart turning over is what needs to be considered if one were to even think about getting this car back into circulation. Presented here are three factors that might have had contributed to the Nano’s poor show in the market so far.
>> One of the leading factors which everyone otherwise thought should have been the car’s biggest USP might well have acted against it.
The “aam aadmi” read “middle and low middle class” in India. It is this group that was supposed to form the biggest customer base for the Nano. However, the cheap car propaganda has done more harm to the Nano than good so that its major consumer segment might be into believing that owning a Nano would lower their stature in society.
>> Cars in India are more a status symbol as much as it is for convenience or as a utility item.
The low cost factor of the Nano therefore turns out to be its own enemy rather than its friend.
When it comes to re-sale value as well, the Nano falls way behind any of the other cars that are available in India like the Chevrolet Spark and Maruti Alto.
The difference in price between a Std BSIII model Nano and that of the used car section in particular the “Spark” is around Rs. 50,000. Customer would rather prefer to go for the Spark given the marginal cost difference. The same Nano is priced at 1.82 lakh for the CX BSIII model and once again the not too significant price difference with the Spark or the Alto which one could very well get at 2 lakhs made the latter more attractive.
The low cost advert that Tata Motor had used for their Nano car therefore does not seem to convert to anything of a challenge for other cars makers at the ground level.
Jobi Thomas who is the Sales Head at Mahindra First Choice, Kochi explained that “People buy Nano as their third or fourth car.”
This proves that Tata Motors had got it all wrong in their perceived customer base to be that of the middle class and not the ultra-rich.
There is however conflicting remarks that comes from Product Manager and Nano dealer with RF Motors, Kochi, Robinson who says, “Nano has gained visibility in the market and people are buying it. Nano units between 80 and 90 are being sold a month.”
Nano has however already appeared in the used car market coming at a price of Rs 1 lakh which is nothing much to talk about as far as value for money goes.
>> With sales of brand new Tata Nano itself flagging, its all but natural for the re-sale value of the car to also take a hit.
Tata however is leaving no stones unturned in their endeavor to push the Nano up the chart of success rather than sit back and accept it as a failure. With its modular format the vehicle is most suitable for reassembly for use in Latin American regions whose economic conditions bear a strong commonality with that of India. There are the SAARC regions also that Tata is exploring as its probable future market area.
There is probability that Tata may have an electric version of the Nano though a diesel version that would be extremely frugal has already been confirmed by Tata Motors.
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