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Saving the Nano….

After the fantastic launch of Tata Nano, the cheapest car in the world, we have seen that the fan fare and the interest levels have not kept up and there is a drastic decline in the sales of Nano and the Tata Motors management is working overtime to get this corrected and to generate interest. A big ad campaign has been launched. The results are yet to be seen. Tata Motors is trying hard to revive the fortunes of their Chairman’s dream project. 

  1. Safe and Secure: No one wants to buy a car which is considered to be un-safe. The first thing that they need to do is to fix the issues that caused fire while driving and drive home the message that the vehicle is safe and secure to be used. Easier said than done. The message has to go across to one and all. The best way that I can think of getting the point across is by getting Ratan Tata to use the Nano for local transportation at least for a month. This will generate the buzz and news hungry media will do the rest.
  2. Distribution strategy: Current Tata Motors dealers do not have much incentive to promote Nano as they have much more profitable products to sell. So, launch a series of exclusive showrooms for Nano, ideally in Tier 2 and 3 towns. Even better would be if they encourage people from within the Nano team to take up these dealerships and support them. No one can beat the enthusiasm that they will bring to selling Nano.
  3. Business Model Innovation: Tata Motors can also think of newer business models in automotive business. The following models are worth a thought:
    1. Time share resorts model: Customers do not buy the car outright but buy the right to use the car for a certain number of days in a year. They share the car with other similar customers.  This will solve the problem of them not needing to find space for parking and also reduce their total cost of ownership. Also, as per my understanding the model has never been tried in the automobile industry. Tata Motors can either float a completely new company to manage these operations or outsource them to new entrepreneurs – (Franchise it). This will give a huge boost for the sagging revenue for Tata Motors as the new franchisees will buy cars based on a pre-agreed basis ( for example, 1 car for every 4 such customers).
    2. Mobile phone business model: Find a way to give the car away for nothing and charge the customers for the service they provide – transportation or miles driven. This could be achieved by partnering with all the oil companies and them charging a pre-defined amount above the prevalent fuel price. This is already being tried by BetterPlace for their electric car. This model is difficult to implement but can give huge competitive advantage to Tata Motors not only in the local market but also when they plan to start selling Nano in other markets as they can learn from the experiment in India and perfect the model.
These are just some of the ideas that I could think up. Is there anything else that they can do apart from just running advertisement campaigns? 

I would love to hear from everyone out there, about what else can Tata Motors do, in order to save the Nano. 
Categories: Uncategorized Tags: , ,
  1. Anonymous
    January 19, 2011 at 10:57 am

    Point 1 will work but Ratan cannot act like Branson – i will be surprised if he do it
    Point 2 will work. this is how maruti and Hero Honda did it in initial days (read it)
    Point 3 Interesting but difficult to pull off. i dont see the drive in Tata Motors to drive this (hehehe)

    Saddest part is that they generated so much press and awe (even internationally) when they launched it. With half-hearted efforts and sub-par product plus sub-par strategies they have lost it all… i still dont see them getting it back. they need to do something spectacular!!! It was sad when i read in WSJ that thier sales decline 80% yoy…

    – you know who…

  2. January 20, 2011 at 8:05 am

    Good thought. Agree with point 1 and point 2 but still not convinced with the business model innovation 🙂

    I feel that they should try to replace autos like indica did for cabs. Just my thought.

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