Searching Markets For Nano

Searching Markets for Nano

Nano has created an unprecedented hype, witnessed only once when Fiat launched its UNO around 1995. UNO promised much but delivered only little. More than 300,000 bookings were done for UNO, even before its production. The results, company couldn’t cope up with the production which resulted in mass order cancellations for UNO, taking a toll on the brand.

But pundits this time believe Nano to create new landmarks. So, let’s start by studying the target market. Recently I read an article in Business Line about rural market & its growth prospects. Even when the markets are choppy, analysts expect rural market to grow at an astounding rate. After our interactions with rural marketing professor Hari Goyal, we got convinced of the potential of the rural market. No doubt, Tata believes Nano to be a hit among rural crowds. We would start by answering why a two wheeler owner in semi-urban area say Chapra buys Nano. Will Nano replace his Bike? I don’t think so. Will he travel to the Municipal office on Nano instead of Bike? I don’t think so, because of the operating expenses say petrol. So, is Nano a symbol of social status in Villages and a symbol of utility vehicle in Metros? I am Foxed. I am not denying that Nano won’t sell. It will definitely sell because it culminates lot of options, but I see a marketing problem here and not a sales problem. The biggest P of Marketing i.e. positioning can pose a difference. Definitely, I believe that it is pretty clear that Nano is not a status symbol in Metros, but a utility vehicle. Something, that provides value for money. People in metros are increasingly getting brand conscious, which explains the dwindling sales of Maruti 800. I don’t see any reason why after 2 years we won’t see Nano on the roads of Delhi as Taxis. But I believe that one of the main reasons in rural areas to buy a car is social status. So, how does a Taxi become a status symbol in villages and towns? One of the main gainers of this dissonance may be Bajaj’s small car when it’s launched in 2011. People always believe that the 2nd version of something is better and more appealing.

Now, let’s think what is Tata Motors gonna achieve with Nano? Analysts expect Nano to contribute to only 3% of top line growth of TM. Nano is expected to break even in not less than 5-6 years. Tata Motors right now, is soaked in debt. It is expected to clear not less than $2bn before September to continue its operations, forget about other debts. Nano may help Tata gain some popularity and gain more respect in the eyes of a common Indian, but I seriously doubt whether it will any way help them to make up for their controversial decisions to take over JLR & Corus. The facts above explain the increasing pledging of shares by TCS, the only cash rich subsidiary of Tata group.