Tata Nano Marketing Strategies
Tata Motors produces commercial vehicles with a range of light to heavy trucks, buses, and tractors. In addition, Tata Motors produces passenger vehicles, and luxury cars from their subsidiaries, such as Jaguar and Land Rover. Tata Motors is the biggest subsidiary of Tata Group founded as a trading company dealing opium in 1868 in Bombay, India by Jamshetji Nusserwanji and Tata Motors, is currently operated by his grandson Ratan Tata. According to the Tata Motors web site (2009), the company was listed in the New York Stock Exchange as the first automobile firm from India in 2004.
Tata Motor’s is headquartered in Mumbai, India and Tata Motors has 23,000 employees. According to Standard and Poor’s Net Advantage – Tata Motors, the company has approximately 13% increase in sale from last year. In addition, the overall market share of the company is about 74 in Fiscal Year 2009. In the same year, the Tata Motors has launched Nano car which is the world’s smallest and cheapest car. The company business is expanding internationally to the U. K, South Korea, Thailand, and Spain.
Ratan Tata calls that car as “People’s Car”. Ratan Tata got success in making his company the world’s rank
In 2008, Tata Motors purchased Jaguar and Land Rover which are traditional car makers in the U. K. Also, the company announced the launch of the cheapest car in the world, the Nano, to car markets such as Europe, and the US. Plus, they already started to sell the car in India this summer, 2009. Tata Nano is the first national family car developed for the Indian market. These affairs led the world to know of Tata Motors. According to Tata Motors’s annual report (2009), their business is growing.
This car is so-called “Tata Nano”, US$2500, which is cheaper than other competitors such as Toyota, Honda, and Suzuki which cost approximately US$ 5,000 a car. Therefore, many blue-collar workers, who have low income and prefer to have a car, can easily afford Tata Nano by spending less amount of money. In addition, it provides 21 percent more spacious to drivers than current compact cars in the Indian market. This feature is also special that no one has such as a rear engine which facilitates a driver to steer a car more easily and faster (Business Today, 2009).
This is the strength of Tata Nano which no one can imitate its product recently. Low production cost • According to the Economic Times (2009), Tata Steel is the exclusive steel supplier of Tata Motors to supply its steel to produce the world’s smallest and cheapest cars. The Tata Motor is able to take advantages of low cost and high qualities of raw material to produce cars because the company has their own steel company. One main reason is that Tata Motors can make the cheapest car in the world because of the cheapest cost, which is roughly US$ 600 per car. (The Environment, 2008).
Both Tata Motor and Tata Steel are also working together and design cars to ensure the finest quality with customers. Approximately 97% of Tata Nano’s raw materials come from Tata Steel. As a result, Tata Motors can control and maintain cost of raw materials such as steel and iron plate to be stable which is one of the parts of car production. Weaknesses Weak financial performance • According to the annual report (2009), the company’s gross debt increased to $3. 06 billion in March 31, 2009. The cost of acquiring Jaguar and Land Rover was $2. 3 billion, and the sales of these subsidiary decreased by 51% in the identical year.
In the same year, domestic sales declined by 15. 2% and 4. 8% in the passenger and commercial segment, respectively. Raw material costs increased to $5. 25 billion in comparison to last year. The employee level increased 36% to 49,473 people. Therefore, the employee cost increased by 161. 5%. (Financial report FI, k-20, 2009. ) Recent damage to reputation • Since the explosion the Tata Nano news, customers are terrified to use the car. According to “A Fire scare for Tata Motor’s low-cost Nano” (2009), the whole situation has been treated differently by Indians.
The owners of Nano are scared of driving the car. The customers are now demanding their money back from Tata Motor. The company is ready to replace the car, but people do not want replace it; instead, customers want their money back, so they can buy another car. As a result, the reputation of Tata motors is in danger. (www. EconomicTimes. com) Opportunities Customers’ concentration on new technologies • Nowadays, customers are more interested in high technologies cars. They will consider the car that use eco-friendly engines, such us hybrid, bio-ethanol, electric engines, etc.
Many technologies are being installed in cars in order to attract customers, and thereby demand for these cars is increasing. In the Indian automobile industry, fuel efficient and environmentally friendly vehicles are also becoming more popular. Considering the fact that the Indian automotive industry is the second fastest growing industry in the world, and it produced about 2 million vehicles annually, (Indian Industry, 2009. ) Tata Motor also plans to produce Nano-E, which is an electric-drive version of the car (The Economic Times, 2008). Expand the business to the rest of the world Acquisition of Jaguar and Land rover was completed with their value around US$2. 3 billion.