Here’s how Tata Nano can still become a global rockstar
Future for Ratan Tata’s fantasy project, the Tata Nano seems to be staring down the barrel of a gun as it fights with dismal sales and growing fever within the company. Widely considered to be the Rs one lakh car or the car that two-wheeler buyers could buy is not even being produced in four digit numbers in an entire quarter, let alone the sales to customers. Recently, the Nano project again came under fire as Cyrus P. Mistry recently released an official statement in response to some facts in the two thousand seventeen Annual Report of Tata Motors. In his statement, Mistry said that while the Nano was a courageous project, it didn’t build up success due to many reasons. During his tenure, he attempted to improve the product with features such as an opening tail gate, power steering, and AMT but none of them were able to put the Nano on the road to success. Mistry also stated that since these moves did not bring the desired result, a unanimous decision was taken to discontinue the Nano about one year back. A source close to the development in Tata Motors said that out of the Rs 280,000 crore revenue of Tata Motors, only about Rs 9,000 crore comes from Passenger Vehicle business and of that Nano contributes a very petite amount. While Tata Motors might take more time to shut down the Nano production, here’s how it can make a successful puny car again and fulfill the aim that Nano was made for – safe and affordable transportation for masses.
Axe the Nano brand very first
The very first thing that Tata Motors should do is to say goodbye to the Nano brand altogether and limit its losses in the project. The reason for this is ordinary as the Nano brand is synonymous with failure for most people. So attempting to sell even a excellent car as Nano wouldn’t yield positive results. It’s almost like attempting to swim with a strong rock tied to your feet. Sales and production numbers further testify the failure of Nano. The company didn’t even produce 1,000 cars in three months of April to June 2017. What’s surprising is that despite such a dismal spectacle, the Nano isn’t a bad car at all and is outstanding actually on many accounts such as space, safety and manoeuvrability. This clearly shows that Tata should get over legacy issues and stop making the Nano and simply relegate it to the company’s history books. Even if the country’s best-selling car were to be sold as the Nano, its sales would simply plummet.
So how to make the Nano successful?
Actually, no one can due to the issues discussed above but the objectives that Tata Motors set out to fulfill with the Nano can still be met. The only way to do is not by contesting with Maruti Suzuki and Hyundai but by simply leapfrogging them and coming in an area where its competition is still in a nascent stage. Light electrified vehicles are the only one such area where Tata Motors could take a lead with an all-new petite electrified car. The company already has the manufacturing plant in place and also has a supply chain that could come in handy for a petite car. Yes, having an electrical powertrain would mean that one will need to get a fresh battery and electrified motor supplier among others but there are already global suppliers with cost-effective tech almost ready.
This is where the TAMO came in as a good news as the company announced it would streamline its platform strategy and only have two modular platforms. Later, Volkswagen Group through Skoda was expected to inject a partnership to co-develop a modular platform but as most of you would know it, the deal was recently called off. This means Tata will now either have to develop the platforms on its own or look at finding a fresh playmate. A modular platform is key to the company’s passenger vehicle business and the company should act quickly on it. Such a platform can ensure numerous electrical vehicles across segments, which could increase volumes, bringing down the battery cost. The opportunities don’t end here since the recipe of a good and affordable petite electrical car hasn’t been perfected yet globally. If Tata Motors can get its act together in this area, the company will also get access to numerous markets for exports and these added volumes could further bring the cost down. The Nano can serve as a good basis for a fresh puny electrified car that can truly be a global success story.
Tata has showcased the Pixel concept earlier and that’s a brilliant place to commence from. I’m sure Tata is working on something similar as we speak but they need to ensure they do it in time and get over with the Nano saga altogether. If the company can get a head commence over the competition in the electrified vehicle domain, the long-term gains could be superb. Pushing further my belief is the Government’s thrust for fully-electric individual mobility by 2032. Realistically, the plan might not be one hundred % successful but even if it succeeds partly, we’re talking about millions of fresh electrical cars and I don’t need to explain what kind of advantage would a first-mover have in such a situation.
Taking on Maruti or Hyundai in the entry-level segment is going to be more than an uphill task for Tata Motors. The chance hence lies in the puny electrical car segment and if Tata can leverage its vast supplier network and design a good package ahead of the competition, there are numerous reasons to believe that the vision and objectives of Nano can become successful, if not the Nano itself.