In the two years since the Nano was first shown to the world, internet penetration had grown manifold in India. The images of these cars on fire spread like wildfire, thereby reducing the already poor sales, KUSHAN MITRA writes in the concluding part of the series
The engineering compromises of the Nano were nothing compared to its marketing fiasco. People have bought ugly cars and people have bought impractical cars, this is the role of marketing. With complete lack of co-ordination between the marketing and communications functions of the Nano, this was a train wreck that quite a few of us who covered the industry could see from a mile away.
The problemIJ The word ‘cheap’; all communication was about ‘cheap’ and ‘frugal’. Headlines in the international media, and there were tonnes of them, all had the word ‘cheap’, ‘the world’s cheapest car’. Everything was cheap. One of my editors remarked after my visit, “Words matter, ‘cheap’ is a horrible term. I don’t want to buy something cheap, but I will buy something affordable.” In Hindi, the car became ‘sasta’ and in a brilliant counter-marketing move, Tata’s rivals spread the term ‘lakhtakia’ (worth a lakh) in the Hindi press.
My few years writing on the automobile industry by then had exposed me to some brilliant automotive engineers but even more brilliant automotive marketeers. The Nano had some severe flaws as a product, not least of which was that the car had no storage space. I remember, Maruti’s Jagdish Khattar telling me something very simple: “Buyers expect things of a car, they are not buying a glorified motorcycle. They demand storage space, they demand comfort and they demand economy.”
However, the first reviews in Indian automotive magazines described the car wonderfully. It was, according to them, everything a first-time car buyer could want. Khattar acerbically remarked to me, “But they are the experts, they know much more than I do; I just make cars.”
Ratan Tata had launched the car with the words: “A promise is a promise”; base versions of the Nano cost just Rs 120,000, the additional cost coming through taxes. A more feature-loaded variant with air-conditioning, power steering, and a stereo system cost Rs 170,000. It was the cheapest car on Indian roads by some margin as Maruti’s cheapest Alto variant then cost over Rs 250,000.
The Nano was a public relations superhit, particularly globally even as the Indian media belatedly began to ask questions. Because the Indian media, particularly the business media, suddenly realised that this car was going to be a sales disaster. That is, of course, if Tata could get the Nano off the production lines. Pantnagar was a stop-gap, demand for the car was soaring; the Tata PR machinery was getting stories of first-time car owners into the media with the agenda, “See, this was Ratan Tata’s vision — first-time car owners moving away from two-wheelers.”
But then stories of shoddy build quality began to appear even as prices began to creep up. A decent-spec Nano cost almost Rs 220,000; the price difference between the Nano and Alto was evaporating. Ratan Tata’s promise did not stand for too long; Tata Motors beancounters realised that the Nano could sink the company. And then came the fires.
March 22, 2010. Satish Sawant collected his first car, a Nano from a showroom in Mumbai. Forty-five minutes later, while driving down the Eastern Express Highway to his home in suburban Mumbai, his car caught fire. Cars catching fire is not unusual, a brand new one catching fire is. And pictures of this flaming Nano spread like wildfire. In the two years since the Nano was first shown to the world, internet penetration had grown manifold in India, and this picture was the lead image across web editions of newspapers.
This coupled with stories of other Nanos catching fire, such as one on Delhi’s Aurobindo Marg which also made headlines, scuppered sales. Initial buyers of the Nano were a split group; those who had bought the Nano as a second or third vehicle loved its convenience, but first-time car buyers found the lack of luggage storage almost debilitating. With Maruti dropping prices on their best-selling Alto small car, and Hyundai India coming up with the Eon, the Nano was never going to fulfil its sales targets.
Even as the Sanand plant came online in an incredibly short span of 14 months, partially because the Singur plant was effectively transferred, it has never hit its maximum production. Sales topped out in 2001-12 at around 75,000 units — less than a third of Alto sales. Subsequent marketing campaigns, targeting urban millennials with a rebranded ‘Twist’ variant, were disastrous. Even as Tata Motors successfully changed its image with other launches, particularly the Tata Tiago, the Nano remains a broken dream but one that refuses to die, as recently ousted Tata Sons Chairman Cyrus Mistry hinted is for “emotional” reasons.
Ratan Tata didn’t just launch the Nano in 2008, he also took the decision to buy out Jaguar land Rover from Ford. And while the Nano dream collapsed, JlR has gone from strength to strength.