Tata "nano": The People's Car

Tata "Nano": The People's Car

1. What inspired Tata Motors to build the Nano? Why was there a need for an inexpensive car in India?

Tata's strategy mentions economic and pragmatic factors to build cars' market. For example, middle-class household incomes can afford it especially for families concerned with safety and comfort. By developing an inexpensive car, Tata could attract consumers who were relegated to riding scooters and motorcycles. Tata thinks that the Nano could increase that pool of potential auto owners by as much as 65 percent, to 30 million.

2. What innovative steps did Tata undertake to design the Nano in a way that would meet the $2,500 price tag? Do you think the low price automatically means poor quality? How did Tata Motors address the quality issue while developing its budget car?

The first innovation step for the Nano figure out what its target customers could pay and then worked backward from that price. And also partners will help to take on challenge and build a $2,500 car that would reward all involved with small profit. Tata identified the basic features that customers required in a car, and then asked its engineers and suppliers to develop a car with those specifications that would also meet the $2,500 final price tag. I think the low price automatically means poor quality. Firstly, the key feature for producing Nano is lower cost, such as eliminating actuators in the headlights and using of lightweight steel. The Nano contains a smaller engine that other cars because more horsepower would be wasted in India's jam-packed cities. The company also used an innovative kit approach that allows it to construct components and ship them separately to be assembled in multiple locations.

3. What caused delay in Nano's launch? What important features of the Indian economic environment were key factors that caused the problem? What does this story teach about the risks of doing business in India?

Tata Motors had initially planned to manufacture Nano in Singur, West Bengal, India. However, the problem took place in the West Bengal government. Prior to the purchase, the government did not actually own land, but acquired it from local farmers by imposing the force of eminent domain. The protests hinged upon allegations that Tata forced farmers from their land and handed out payments that were a fraction of the land's value. The dispute went to the peak, over 30,000 activities and farmers besieged Singur, in West Bengal state, to rally against the plant. Finally, Tata Motors had to make a detailed plan for the relocation of the plant and machinery. The important features of the Indian economic environment were land, because most of land is used for agriculture. Local farmers' living related to land. Therefore, doing business in India has to consider about the land and local farmers.