Tata Nano

Pranshul(39)

presentedby: Anoop(4), Ashish(9) Digvijay(14), Honey(19) Loveneet(24), Nayan(29) Nishant(34), Priya(44), Sagar(49) Shobhit(54),Urendra(59) Pankaj(64)

Introduction Of Tata Nano

TATA MOTORS, one of the leading players in automobile industry in south Asia , the worlds second largest Bus manufacturer and 4rth largest Truck manufacturer, launched the cheapest car in the world , TATA NANO. The Tata Nano is an inexpensive, 623 cc rear-engine , four-passenger city car built by the Indian company Tata Motors and is aimed primarily at the Indian domestic market. It provides urban and rural consumers a way to fulfil their dream of owning a car.

At the time of inception , the estimated purchase price for consumers was Rs.100,000(Indian) but a few years down the line , the prices of raw materials increased by 23% and the car price raised substantially. The fixed prices in India are as follows;

PRICE: Base Model Rs.135151 TATA NANO CX Rs.164481 TATA NANO LX Rs.181498

Tata Nano has opened a completely new market segment catering to the lower middle class or middle class segment i.e. the lower income segment. Currently this is the only car available in this Ultra Small Car market segment. As a result, Tata Nano has established a Monopoly in this segment. The price of the product is very important in attracting buyers and this is one of the major reasons for the car to be such a huge success in the country as well as across the globe. A similar kind of setup is proposed in Indonesia. Apart from the low cost, the car provides a better fuel economy (20km/l), greater space inside the car compare to Maruti.

With the launch of Tata Nano Indian car market has increased by 65%.

One of the greatest USP of Nano is its price and 21% more interior space and 8% smaller exterior.

Nano gave nail biting competition to the players like BAJAJ, MARUTI, HYUNDAI, FORD and many more.

Views In Favour
With the production of Nano,30% of the population of India was in a position to have the pleasure of owning a car.

Views In Against
It is not suitable for long drive and luxury. it will increase the load on already loaded roads. Security not sure.

High fuel efficiency (20km/l)

Eco friendly

Law of demand: According to the Law of demand other things being constant, when the price of commodity increases its quantity demanded decreases and vice versa.

In the above diagram, the price of commodity is taken on the vertical axis and quantity demanded on the horizontal axis, we can infer that when the price is P1 quantity demanded is Q1. When the price falls to P2 quantity demanded falls to Q2.This shows that there is ans inverse relationship between the price of a commodity and quantity demanded of the commodity.

SNOB EFFECT :
Arise when a part of consumers want to be different from other consumers by demanding less of a commodity of mass consumption and demanding more of expensive products. VEBLEN EFFECT: When individuals are demanding commodities because others are purchasing it. ss( eg : Tata Nano )s

Substitution Effect:

TATA Nano is a substitute to both the two wheelers and the lower car market segment. Because of its low price , it is more demanded by consumers.

Income Effect:

In case of Nano, there is an inverse relationship between demand of Nano and income of consumers . As income of consumers increases they shift towards more expensive cars.

PRICE ELASTICITY Ed=% change in Qty Demanded % change in Price In case of Nano , price elasticity of demand is relatively elastic (e>1) because little increase in its price will lead to greater decline in its quantity demanded . INCOME ELASTICITY
Ey = proportionate change in quantity demanded Proportionate change in income When there is increase in income of consumers , then purchasing power increases and demand for Nano will decrease .

Chart Title
2010 2011 10012 8262 6703 4001 4105 4710 3525 8707

January

Feburary

March

April

7% 19% 11% 15%

19%

Body shell Engine & Transmission 22% Electrical Interior Element Tyres and Suspension Production Cost Other Expenses

7%

SWOT ANALYSIS OF TATA NANO

STRENGTHS: External 8%less than Maruti 800 Internal 21% more than Maruti 800 Eco friendly High fuel efficiency Variomatic gear systems Tested successfully for crumpleds zones 41 patents for innovation

WEAKNESS: No Modern facilities i.e. ABS , EPS , Traction etc Less boot space Poor engine cooling & hence, over heating Small tyres Window wind down by hands Less resistant to collision

OPPORTUNITIES: World Wide Appeal can be motivated Create employment Use in place of auto-rickshaw Second hand market can be motivated Diesel and Electric variance Developing Low price engine oil

THREATS:
Small electronic cars Traffic Problems Government can increases taxes in metro city Rising cost of Raw-material Reducing parking space Security not sure Bad impression due to late date in market Cost may be increase in future Competitors like Maruti, Honda, Nissan.

CONCLUSION:
Launching of TATA Nano has created a MONOPOLY of Ultra small sized cars in the market.

It has the capability to grab a huge amount of customers in the lower middle and the Middle class of most of the South Asian countries.
Also if the price of Nano increases by around Rs. 50,000, considering the overall features and price, the consumer could get indifferent between Tata Nano and other small cars with more facilities thus reducing Nano sales.