Tata Nano

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Tagline/ Slogan : Khushiyon ki chabi

SWOT Analysis: It will give us a clear picture of the car as it is and how it compares with its competitors. It will give us the strengths on which Nano can build on, the weaknesses it need to work on, the opportunities it needs to capitalize and the threats it need to be aware of.

Strengths

- First innovator – set a benchmark– ‘People’s car’

- 31 design and 37 technology patents filed - Innovative engineering which provides superior facilities

- Affordable price (Rs 1.65 Lakh - Rs 2.99 Lakh)

- Good fuel efficiency (21.9kmpl to 25kmpl) translates to lower running costs and better economy.

- NANO eMAX (CNG driven) has the lowest carbon footprint of 75.269 gm/km (most fuel efficient) and gives a mileage of 36 km/kg

- Easy to drive in traffic conditions (smallest turning radius - 4m). Easy manoeuvring of the nano is a major strength.

- Low maintenance and handling cost which is very important for the target segmented base.

- First-in-segment digital information display with digital clock, dual trip meter, instantaneous fuel consumption, distance-to-empty, average fuel consumption and gear shift indicator

Weaknesses

- Just meets the Bharat Stage 4 standards, therefore, difficult to introduce in developed markets like Europe

- Absence of modern facilities and high safety standards

- Only useful for specific terrain like city and plains, difficult to drive in mountains

- Less boot and trunk space

- Perceived as a cheap product which repels the aspirational customers

- Limited international presence

- No foothold in the luxury car segment as its domestic market has isolated it from lucrative segments

Opportunities

- Capitalize on the fact that it is the most affordable car and acquire new customers

- Increasing per capita income and purchasing capability of lower middle class which are its main customers

- Promote CNG model as more people are moving towards green energy

- Increase international market presence especially Europe and South East Asia where there is more demand in this segment

- Improve emission standards which will provide it access to European market

- Associate it with Land Rover and Jaguar dealership which will increase the footprint in developed markets

Threats

- Other competing car manufacturers have been in the passenger car business for 40 to 50 or more years. Therefore, Tata has to catch up in terms of quality and lean production.

- Product innovations and frugal engineering by competitors

- Strict safety standards in place in most of the countries.

- Sustainability and environmentalism could mean extra costs for this low-cost producer. This could impact its underpinning competitive advantage.

- The branding was done as “the cheapest” car and not as “people’s car” as it is being done now. There is still a perception of it being a “cheap” car associated with it which is perhaps the biggest threat.

- Many new competitors are entering the market like Bajaj, Honda, etc.

PEST Analysis: It is a standard way of analysing macro-economical forces which impact a company or a corporation.

Political

- Need to co-operate and be contribute to the policy formulation process of Ministry of Shipping, Road Transport & Highways (MoSRT&H)

- Uncertain taxation levels are an important consideration. General excise duty rate increased to 12.5% from 12%, thereby increasing excise duty on small cars, CVs, 2Ws, etc. and service tax rate increased to 14% (Source : Union Budget)

- Regions of India offer incentives such as tax/excise duty benefits through special zones and tax holiday schemes

- Labour regulations should be closely monitored while paying attention to regional governing bodies

- Developments in international political scenario such as South Asian free trade agreement, getting MFN (Most favoured Nation Status) from neighbours and changes in the WTO agreements affect the automobile sector

- Collaboration with Jaguar and Land Rover - Full comprehension to governing bodies and laws regulating commerce in UK

- Political controversies – The Singur controversy – TML acquired a land of 997 acres for manufacturing Nano but this resulted in displacement of farmers and attracted heavy criticism. However, plant was closed subsequently and reopened in Gujarat.

Economical

- Consistent growth in the automobile sector in India which saw 8.68% YoY growth in 2014-15

- Automotive export has also shown considerable growth of 14.89% last year including 4.42% growth in the passenger vehicle segment. South and south-east Asia is a potential market.

- Huge market to tap in Tier II and Tier III cities –8% growth in the auto sector – Large potential target segment for Nano

- TML’s economic scenario is quite promising with GDP growth around 7%

- Pricing and currency would affect the vehicles in terms that it would define worth of exporting

- Banks have been grappling with huge NPAs mostly coming out of corporate loans. This has led them to focus on retail loans. All consumer segments of the market are expected to benefit out of this.

Socio-cultural

- The manufacturing site of Nano eventually attracted a lot of investors and automobile companies to set up their respective manufacturing bases. The city, Sanand, is now being called the Detroit of