Tata Nano could be termed as one of the most anticipated car launches in the automotive history of India. But why did it fail? Let's find out.
The concept behind the Tata Nano was deeply rooted in the Tata Group's principles. Business for Tatas is not just to mint profits. Tatas are actively involved in Indian economy growth and success. Many of their activities and commercial strategies are connected with social connotations.
The Nano wasn't any different. Ratan Tata had for years watched the suffering of the Indian lower middle class. He saw how ordinary people travel by public transportation or on two-wheelers. Wind, rain, or scorching; the lower-middle-class never had the option of a private car. Back then, owning a personal car was seen as an enormous luxury. At best, any normal person could buy a two-wheeler, nothing else.
The car was considered a sign of status. The costlier a car is; the more respect and admiration you would command in the society. The wealthy class had a number of cars but there were a very few families in the middle class that could afford a car.
Ratan Tata tried to solve this problem. He wanted to create a society in which a personal car is treated as an essential item rather than a luxury. He wanted to make car affordable for the masses. He envisioned a world where people don't have to face the harsh weather and hassles of public transport for commuting. This how the idea of Nano came into his mind.
But Tata Nano failed to attract many takers ever since its launch in 2008 and later it was discontinued in 2018.
Reasons why Tata Nano failed
Advertising was not emotionally connected
One of the most difficult elements of marketing a vehicle such as Nano is advertising. A fundamental rule of advertising is establishing an emotional connection with the audience that allows them to feel the product. Tata could not accomplish it with their Nano ads.
Although some TV ads were excellent, most viewers could not connect to what they saw on the screen. Consumers could not connect to ads, making the situation even worse. In a country where emotions in everything play such a crucial role, the separation caused damage to brand Nano even before it reached the roads.
Inadequate build quality
Nano's safety rating was one of its primary problems. The manufacturer hoped the Nano would earn a four-star rating in the Euro New Car Assessment Program's (NCAP) crash test. However, it totally failed in 2014 when the German car club, the Allgemeiner Deutscher Automobil-Club (ADAC), tested it.
Nano had no airbags and did not provide adequate safety for adults. It also failed to comply with the UN's fundamental safety standards and was not as secure as Tata had stated and expected.
Additionally, the Nano was very light, which made it an unsuitable option for ordinary Indian roads, which are not always silky smooth. It also meant that driving felt unsafe due to the lack of bulk.
In addition, many incidents in which Nano caught fire for mysterious reasons were reported. The company stated the reason was foreign exhaust-related faulty electrical equipment.
Issues related to production
Another big issue contribution to the failure of Tata Nano was the long wait for delivery. The Nano was intended to manufacture in West Bengal at the new plant. Unfortunately, the company was unable to obtain land for the plant and began manufacturing at its Sanand facility in Gujarat.
Moreover, the reduced manufacturing capacity could not meet the initial demand, and many customers did not purchase a Nano early because no one was available.
Two-wheelers enable people to move smoothly without worrying about parking issues. The same wasn't true about the Nano.
Despite being a tiny car, the ownership cost of Tata Nano was not cheap. It also lacked several features like music system and AC that you would expect in a normal car.