The Tata Nano: The People's Car (a)

9 Pages Posted: 16 Jun 2009

See all articles by Paul Farris

Paul Farris

University of Virginia - Darden School of Business

Amy Lemley

University of Virginia - Darden School of Business

Rajkumar Venkatesan

University of Virginia - Darden School of Business

Abstract

Students identify promotion, price, place, segment, targeting, and positioning for marketing “the world's cheapest car.” This case is effective for MBA, undergraduate, and executive learners studying market segmentation, pricing, cannibalization risk, pricing, and break-even sales in the face of different price and cost scenarios. Has Tata chosen the right marketing strategy? Does the Nano represent an evolution or a revolution in automobile marketing?

Excerpt

UVA-M-0768

Rev. Feb. 1, 2013

THE TATA NANO: THE PEOPLE'S CAR (A)

It was one of the longest-awaited and most talked-about automobile debuts in India. On January 10, 2008, Tata Motors unveiled its (U.S. dollars) USD2,500 car (also called “Rs1 lakh car” or “the people's car”) at the ninth Auto Expo in New Delhi. The Tata Nano brought a media blitz and a crush of onlookers that required top-level security. Would the car live up to its hype? And did its launch signal a new era for the small car market in India? How could Tata ensure the product would be profitable?

Widely touted as the cheapest car in the world, the Nano was scheduled to be available in September 2008. In addition to paying (Indian rupees) INR1 lakh—equivalent to INR100,000—buyers would also have to pay 12.5% value-added tax along with charges such as road and transportation taxes. The two-cylinder gasoline-powered version would debut first; the diesel versions would soon follow.

The Nano was one of the world's most fuel-efficient cars, getting 52 miles per gallon (mpg) in the city and 61 mpg on the highway (22 km per liter and 26 km per liter, respectively). Measuring 3.1 meters by 1.5 meters, it displaced Maruti Udyog's Maruti 800 as the world's smallest car, yet its seating room was 21% greater than the 800's—providing ample room for four adults.

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Keywords: Megacities, China, Indonesia, environment analysis, promotion, price, segment, targeting, positioning, pricing, marketing strategy

Suggested Citation

Farris, Paul and Lemley, Amy and Venkatesan, Rajkumar, The Tata Nano: The People's Car (a). Darden Case No. UVA-M-0768. Available at SSRN: https://ssrn.com/abstract=1420597

Paul Farris (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-0524 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/farris.htm

Amy Lemley

University of Virginia - Darden School of Business

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Rajkumar Venkatesan

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/html/direc_detail.aspx?styleid=2&id=5808

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