For India's Tata Motors, low prices no longer a selling point
TAKAFUMI HOTTA, Nikkei staff writer
The Nano Twist targets urban young consumers.
MUMBAI -- Decked out in jeans and purple shirts matching their latest offering, Tata Motors executives not only introduced a beefed-up version of its ultracheap Nano this week, they also unveiled a new strategy focusing on trendy features, not just affordability.
The Indian automaker on Monday showed off the Nano Twist, which comes with electric power steering and other perks. The car is being targeted at young consumers in urban areas -- hence the jeans.
The new version will cost around 240,000 rupees ($4,238), significantly higher than the regular Nano's 100,000 rupee price tag, but still cheaper than the Alto from Maruti Suzuki, which sells for more than 300,000 rupees.
When Tata launched the Nano in 2009, its unprecedented low price made headlines worldwide. It was then developed in earnest with support from then-Chairman Ratan Tata. But the bloom soon faded. Five years after the vehicle rolled off the assembly line, its cumulative sales stands at a mere 240,000 units or so, less than the annual figure initially envisaged. And with monthly sales hovering around just 2,000 units recently, the Nano is a main reason for the company's lackluster performance.
The failure can be attributed in part by the many obstacles the firm faced. It had to relocate a plant's construction after strong opposition from local communities, resulting in a supply shortage. And in 2010, frequent reports of fires associated with the vehicle undermined consumers' trust. In addition, inflation and an economic slowdown from 2011 sorely affected low-income households, the target customers of the Tata Nano.
Some say the model's concept was not matching consumer needs in the first place. Automobiles are a status symbol for Indian drivers. When making such an important purchase, there is little incentive to choose a model labeled as the world's cheapest. A man in his 30s visiting a Tata dealership in Mumbai recently called the Nano's features so austere "it doesn't look a normal car," saying he would rather buy another model even if a little more expensive.
The Nano's flop offers a hard lesson other carmakers have to learn. Lately, more people in rural areas of India are ordering vehicles after carefully comparing their features and performance on the Internet, according to an official at a Maruti Suzuki outlet. Consumers in India are clearly growing more car savvy, so a product strategy focused only on low price is likely to fail.
| Reply via web post | Reply to sender | Reply to group | Start a New Topic | Messages in this topic (1) |
to Subscribe via email :
batavia-news-subscribe@yahoogroups.com
----------------------------------------
VISIT Batavia News Blog
http://batavia-news-networks.blogspot.com/
----------------------------
You could be Earning Instant Cash Deposits
in the Next 30 Minutes
No harm to try - Please Click
http://tinyurl.com/bimagroup
--------------
No comments:
Post a Comment