WHY THIS "NA" "NO" TO NANO?
By Ruma Dubey
A fortnight ago, Tata Group chairman Ratan Tata said that there have been mistakes in the marketing and distribution of the Nano.
And that has set everyone thinking. It has been projected as a “poor man’s car” and many now say that this has been its biggest undoing. We may be poor and like millions of others on the street, yet very few want to be associated with a car which is exactly for those on the lower rung of the economic ladder.
Does that mean that we as Indians are so status conscious today that we pay no heed to economic sense? Has consumerism seeped in so deep? Today, a car depicts an image and is no longer a means to get from one place to the other? And the worst part is that Ratan Tata too seems to think that this perception needs to be corrected, which is when its car sales will pick up.
In Dec 2011, sales of the Tata Nano were at 7,466 units, 29% higher on a YoY. Cumulative sales of the Nano were at 47,112 units compared to 46,760 units till December 2010. This may look like an improvement but it is nowhere near what Tata Motors had aspired to achieve. As per R.Ramakrishnan, sales are far off the target of 25,000 cars a month, and the Nano plant, with an annual capacity 250,000 units, produces only 10,000 a month.
Surely perception alone cannot be the sole reason. Many say that Nano flopped because no one wants to buy the same car which your postman or dhobi is buying. But if that is so then how we come we do not mind if it’s the same mobile or the same TV? Yes, there does exist a subtle class divide but is it so deep rooted? Indians are known world over as one of the biggest savers and when we are so conscious about every penny we spend, would we allow mere status to decide to what we buy or use? Maybe for some but not for all.
Apart from the perception, what actually went against the company’s Nano sales, were two pertinent reasons – pricing and safety concerns associated with some Nano’s catching fire.
Pricing is actually the major issue. People had thought that the car would cost not more than Rs.1 lakh but today, the base model, sold without air conditioning costs Rs.1,40,880 and that with air conditioning, central locking and power front windows costs Rs.1,96,959. If one pays a little bit more extra, around Rs.2.32 lakh, one could buy a Maruti Alto. When it comes to servicing and costs of maintenance, none can beat Maruti. So people feel if they could stretch a bit, they could buy an Alto so why settle for a smaller Nano?
And yes, though Tata Motors has now corrected the fire issue, the fear remains. And if this is the first car for many or the second car for the woman in the house to drop off or pick her children from school, no one is yet ready to shrug off this risk factor. Nano’s breaking into fire all of sudden that too at the initial stages of its launch left a dent forever.
The Nano is a car which we Indians should be proud about. It is the first indigenous car of India and it alone put India on the world map, with many even addressing India as the new “Detroit”. The launch of Nano forced some of the biggest names in the world auto sector to explore options of developing their own small and cheap cars.
It is good that the company is now reworking its marketing and distribution strategy for Nano. That, plus with interest rates expected to come down, the same people saying “Na” and “No” to the Nano could have a change of mind.