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                 Priya Mariam Simon
                     NANO- WORLD’S CHEAPEST CAR

       Nano is the most new important innovation of India.      Nano has been created to
cater to the needs of the family that was traveling on a scooter. TATA Motors’s ultra low
cost car is a real break through because of demand in terms of price, size and the delivery
time. This car will cover a very large segment of the population on the parameter-
affordability. Since the price for Nano was already tagged they had to back calculate The
TATA Motors aimed at cost reduction, ensuring quality standards and a car that was safe
on the roads. They reduced their costs by introducing a change in their procurement
tactics like internet auctions, adhesives were used instead of costly welding etc. The
break even for this car would be higher and was intended to be a high- volume product.

       TATA Motors has introduced the Nano with a petrol engine and a manual gear
box. One major feature of the Nano is that its engines are mounted at the rear. The engine
has been designed and developed for keeping the cost of fuel injection low. They are also
working on a diesel engine and a hybrid version for the Nano.

       The four door Nano is marketed as “The people’s car” is powered by a two
cylinder engine with twelve inch wheels, four seats and even a suspension. This has been
built to meet the safety requirements and emission norms to be fuel efficient and low in
emissions. The emissions will be lower than that of a motorcycle. The car’s space
requirement for parking is also another cause that initiates the purchase of Nano.

        The TATA’s haven’t created the demand but they have engineered their product
as the market needs. Nano will help TATA to increase their stake in this segment. Nano
will not cause a major effect on the small car market but it will have an affect on the sales
of two wheelers and second hand small cars. Market players see that Nano’s pricing to be
a risk to TATA’s long term finances. This will also have an adverse effect on the second
hand car market. The second hand car markets believe that since Nano is not air
conditioned it might not attract many customers.

        Maruti, its next best competitor in the small car market said that they wouldn’t
reduce its prices for the model M800. Nano, the people’s car has projected the Indian
auto industry to the global front by outsourcing components. Another positive outcome of
the people’s car is that the auto component manufacturers have to come up with new
products that would suit the small car.

        At the launch of the Nano, the two celebrities were- Rahul Gandhi, the youth icon
and the ace Formula 1 race driver- Narain Karthikeyan. They were amongst the general
public in placing the orders for the car at that moment. This was also a way of marketing

        TATA is planning to manufacture this car in countries where the material and
energy costs are low and they are also trying to achieve a similar price target. They are
looking forward to leverage their partnership with Fiat Auto for sourcing technology and
engineering skills. They are also considering the manufacture of a mini car like the Nano
for the market in Thailand.

        Ratan Tata’s new innovation has bought a proud moment for India and it has
demonstrated India’s technological and entrepreneurial ability. This fulfills the need of
the common Indian who aspires to move from a two wheeler to a four wheeler.






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