The Missed Tata Revolution
In French daily Le Monde, Julien Bouissou discusses the automotive revolution that never was, namely the missed revolution intended by Tata Motors in India.
The writer and his team purchased a mojito green Tata Nano, with A/C and a complete audio system. The car arrived a short two days later wrapped in a red ribbon, as if it was intended to be put underneath the Christmas tree.
First, you are required to break a coco nut, a symbol of higher spirituality and good fortune. Then you have to cut the red ribbon between two metallic posts. Two or three employees suddenly appear in front of you, armed with pastries. They clap their hands in front of you and take pictures of the ceremony.
Customer service is mostly done at home, which is something that pleases the consumers who can thereby avoid India’s massive traffic jams. Two months after the initial delivery, two mechanics arrived on a motorcycle with a new dashboard wrapped in a plastic bag. Within a couple of minutes, they had replaced the previous, faulty dashboard.
There is little doubt that the Nano is the ideal car for New Delhi. The car is small yet at the same time spacious, fits through every nook and cranny and can be parked pretty much anywhere. But driving it in town can present multiple dangers.
For one, elephants circulate through the streets at night quite often, of course without headlights. Red lights stop working all the time, and the right away is hardly respected in town.
The biggest and most unpredictable danger is the bribe. If you get stopped for a traffic violation, you have to “negotiate” the amount of your fine with the police. In that case, the type of car you are driving carries a crucial importance. And the driver of a Nano, assumed to be poor, typically pays a lesser fine.
Yet despite all of these compelling features, Indians have shied away from the Tata Nano. Four years after launch, the car is a commercial flop. By March 1 2013, the cumulative 227,000 cars sold are four times lower than the manufacturer’s objectives.
Back in December 2012, a few days before retiring, the former Tata Motors president somewhat conceded defeat. “We weren’t ready to market the Nano as we should have.”
Everything started in early 2000 when Ratan Tata started dreaming of a car for those who can only afford to ride a motorcycle. In answer to a question from a journalist at the 2003 Geneva Car Show, Mr. Ratan unveils the car’s price 100,000 rupees (a little over $2000 at the time). In other words, the cheapest car on the planet.
On the day of January 10 2008, the legend reaches its peak. Over 1000 journalists from all over the world are taking the New Delhi Auto Show by storm to get a glimpse of the vehicle. During the same decade, India witnesses an average annual growth rate of 9%. Analysts predict an explosion of the middle class, and that the Nano will be its symbol.
But the Nano myth quickly fades in contrast to the harsh realities of another India, that of farmers who refuse to turn over their land for the benefit of industrialization. Day and night, one can hear the chants “Nano, no ! No !” along the Nano manufacturing plant. As a result, Nano Motors has no choice but to find another location… on the other side of the country. The first models are sold almost a full year late. And the worries don’t stop there: a few short days after their delivery, some cars catch fire.
But this hardly deters Tata Motors executives. The order flow is so massive that they need to devise a lottery system in order to figure out who will be the lucky few new Tata Nano owners.
Loyal to its cost reduction policy, Tata Motors neglects marketing costs. Before its launch even, the Nano was the most well known car on earth thanks to an unprecedented media blitz. But according to Gautam Sen, editor in chief of the magazine Auto India, “Tata Motors was incapable of capitalizing on this media notoriety.” Because in India, more so than in any other country on earth, the car represents a symbol of social success. And “because of almost zero advertising, the cheapest car in the world became the car for poor people.”
Maybe the full story of the cheapest car in the world has not been fully written yet. Other, similar cars like the Mini, also witnessed harsh times initially before becoming mainstream success stories. This year, Tata plans to launch a new and improved Nano model powered by compressed natural gas.