A STUDY

ON

“Consumer perception and future potential for TATA NANO.”

Submitted in partial fulfillment for the award of the degreeMaster of Business Administration

Chhattisgarh Swami Vivekanand Technical University, Bhilai

Submitted by,Richa Vohra

MBA – Semester II(Session 2008-2010)

Shri Shankaracharya Institute of Management and Technology

Junwani, Bhilai (C.G.) - 490020

CERTIFICATE

This is to certify that the project “A study on consumer perception and future potential for TATA NANO” submitted to Shri Shankaracharya Institute of Management & Technology, Bhilai in partial fulfillment of the requirement for the award of Master of Business Administration (MBA) is a bona fide work carried out by Richa Vohra, a student of MBA II Sem, under my supervision and guidance. The project was carried during 1.06.09 to 10.07.09 in Sairam Automobiles & Services Pvt. Ltd.

Date: - Richa Vohra

Mr. Narendra SahuM.B.A (2008-2010)

SM. (Sairam Automobiles & services

Pvt. Ltd.)

DECLARATION

I, Richa Vohra a student of MBA II Semester 2008, at Shri Shankaracharya Institute of Management & Technology hereby declare that this Project Report under the title “A Study on Consumer perception & future potential for TATA NANO” is the record of my original work under the guidance of MR. NARENDRA SAHU. This report has never been submitted to anywhere else for award of any degree/diploma.

Place: Bhilai Richa Vohra

Date: MBA – Semester II

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ACKNOWLEDGEMENT

It is a proud privilege on my part to express my sincere and humble gratitude to all those people who have helped me directly or indirectly in the completion of this project.

I thank venerated Mr.NARENDRA SAHU (C.M), who gave me an opportunity to undergo my project in Sairam Automobiles & Services and extend their valuable help and guidance throughout my project.

I pay sincere thanks who spent his valuable time and knowledge and gave me wholehearted support and encouragement in carrying out this project.

I thank all those executives and non executives of Sairam Automobiles & Services who spent their valuable time in interacting and giving their personal time in interviewing them.

Finally, I thank all the team members for interacting and sparing their valuable time with me whenever possible

.Richa VohraM.B.A (2nd year)

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TABLE OF CONTENTS

PAGE NO

Acknowledgement

DECLARATION

CERTIFICATE

TABLE OF CONTENTS

EXECUTIVE SUMMARY

1. INTRODUCTION TO THE COMPANY

1.1 Various product of TATA MOTORS

1.2 Shareholding patterns of TATA MOTORS

1.3 SWOT analysis of the company

2. INTRODUCTION TO THE TATA NANO

2.1 Financial projection

2.2 Technical overview

2.3 Vehicle summary

2.4 Supplies of TATA NANO

2.5 Controversies involved

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3. RESEARCH METHODOLOGY

4. DATA ANALYSIS AND RESULTS

5. INTERPRETATION OF FINDINGS

6. RECOMMENDATIONS

7. LIMITATIONS .

7. CONCLUSION

v. REFERENCES

APPENDICES

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EXECUTIVE SUMMARY

Tata Nano is the cheapest car in the world. It is sold in home country India around Rs 1 lakh i.e. approximately USD 2000. It is manufactured by Tata Motor Limited, the largest to automobile company in India. It’s Chairman, Mr Ratan Tata envisions that Tata Nano become a “People’s car” which is affordable by almost everybody. Tata Nano was first launched in India on 1st April 2009 and expected to be in Indian market by July 2009. Since launching, it has created a huge buzz all over India. Within the first two days of lunching, it has received 5500 booking. The figures keep increasing every day since the launching.What makes Tata Nano so cheap? Basically, by making things smaller, lighter, do away with superficial parts and change the materials wherever possible without compromising the safety and environmental compliance. It is said that Tata Nano has better mileage than Toyota Prius and same gas emission as a scooterTata Nano will be imported to Malaysia by Tata Industries in parts. It will be assembled in its two factories i.e in Shah Alam, Selangor and Pasir Gudang, Johor Bahru. There are four distribution centres in Peninsular Malaysia i.e. in Kuala Lumpur, Penang, Johor Bahru and Kuantan. All Tata Nano cars will be distributed through these distribution centres only. Order can. be made vide these distribution centres or its web site.There are three types of Tata Nano car available i.e. Tata Nano, Tata Nano CX and Tata Nano LX. However, due to hot weather in Malaysia, only Nano CX will be brought to Malaysia and will be sold here. The selling price of Nano CX in Malaysia is RM 13,704 per unit. It is estimated that gross profit for the first year would yield xxx, second year xxx and third year xxx Estimated monthly instalment payment is xxx for seven years period. With this price, the target market is very wide which includes those with income RM 2000 per month, students female workers and scooters’ riders

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INTRODUCTION TO THE COMPANY

Tata Motors Limited, formerly known as TELCO (TATA

ENGINEERING AND LOCOMOTIVE COMPANY), is a multinational corporation

headquartered in Mumbai, India. It is India's largest passenger automobile and

corporation commercial vehicle manufacturing company. Part of the Tata Group, and

one of the world's largest manufacturers of commercial vehicles. The OICA ranked it as

the world's 20th largest automaker, based on figures for 2006

Tata Motors was established in 1945, when the company began manufacturing

locomotives. The company manufactured its first commercial vehicle in 1954 in a

collaboration with Daimler Benz AG, which ended in 1969 Tata Motors was listed on

the NYSE in 2004, and in 2005 it was- ranked among the top 10 corporations in India

with an annual revenue exceeding INR 320 billion. In 2004, it bought Daewoo's truck

manufacturing unit, now known as Tata Daewoo Commercial Vehicle, in South Korea.

It also, acquired a 21% stake in Hispano Carrocera SA giving it controlling rights in the

company. Tata Motors launched the Tata Nano, noted for its Rs100,000 price-tag, in

January 2008.

In March 2008, it finalized a deal with Ford Motor Company to acquire their British

Jaguar Land Rover (JLR) business, which also includes the Rover, Daimler and

Lanchester brand names. The purchase was completed on 2 June 2008 Tata Motors has

its manufacturing base in Jamshedpur, Pantnagar, Lucknow, Ahmedabad and

Pune.

1. History

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Tata Motors launches its first truck in collaboration with Mercedes-Benz.Tata Motors is

a part of the Tata and Sons Group, founded by Jamshedji Nussarwanji Tata and J Baker.

The company was established in 1945 as a locomotive manufacturing unit and later

expanded its operations to commercial vehicle sector in 1954 after forming a joint

venture with Daimler-Benz AG of Germany.

Various Products of TATA Motors

[1] Passenger cars and utility vehicles

Tata Indigo SW

• Tata Sierra• Tata Estate• Tata Sumo/ Spacio• Tata Safari• Tata Indica

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• Tata Indigo• Tata Indigo Marina• Tata Winger• Tata Nano (3RD March 2009)• Tata Xenon XT• Tata Xover (2009)

[2] Concept vehicles

Tata Cliffrider• 2000 Aria Roadster• 2001 Aria Coupe• 2002 Tata Indica• 2002 Tata Indiva• 2004 Tata Indigo Advent• 2005 Tata Xover• 2006 Tata Cliffrider• 2007 Tata Elegante• 2009 Tata Prima

[3] Commercial vehicles

Tata 1616 Starbus

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Tata Marcopolo Buses in the Delhi BRT .

Tata Star Bus in Nagpur, Maharashtra. Tata Low Floor Buses are also used by

administrations in Delhi, Mumbai, Pune, Udaipur and Indore

• Tata Ace• Tata TL/ Telcoline /207 DI Pickup Truck• Tata 407 Ex and Ex2• Tata 709 Ex• Tata 809 Ex and Ex2• Tata 909 Ex and Ex2• Tata 1109 (Intermediate truck)• Tata 1510/1512 (Medium bus)• Tata 1610/1616 (Heavy bus)• Tata 1613/1615 (Medium truck)• Tata 2515/2516 (Medium truck)• Tata Starbus (Medium Bus)• Tata Globus (Low Floor Bus)• Tata Marcopolo Bus (Low Floor Bus)• Tata 3015 (Heavy truck)• Tata 3118 (Heavy truck) (8X2)• Tata 3516 (Heavy truck)• Tata 4923 (Ultra-Heavy truck) (6X4)• Tata Novus (Heavy truck designed by Tata Daewoo)

[4] Military vehicles

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• Tata LSV (Light Specialist Vehicle)• Tata 2 Stretcher Ambulance• Tata 407 Troop Carrier, available in hard top, soft top, 4x4, and 4x2 versions• Tata LPTA 713 TC (4x4)• Tata LPT 709 E• Tata SD 1015 TC (4x4)• Tata LPTA 1615 TC (4x4)• Tata LPTA 1621 TC (6x6)• Tata LPTA 1615 T

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Introduction to the TATANANO

The Tata Nano is a proposed city car debuted by India's Tata Motors at the 9th

annual Auto Expo on January 10, 2008 at Pragati Maidan in New Delhi, India.

Called the people’s car in Tata's promotional material, it was projected to be the

least expensive production car in the world. The standard version of the Nano is

projected to sell for Rs. 100,000 (approximately US $2500, GBP 1277, or € 1700) , not

including fees or delivery. Newsweek identifies the Nano as a part of a "new breed

of 21st-century cars" that embody "a contrarian philosophy of smaller, lighter,

cheaper" and portend a new era in inexpensive personal transportation —

and potentially, "global gridlock". The Wall Street Journal confirms a global trend

toward small cars, led by the Nano.

The prefix "Nano" derives from the Greek root 'nanos', meaning dwarf — as with

nanometer. "Nano" also means "small" in Gujarati, the native language of the Tata

family, founders of the Tata Group.

History and conception

The project to create a 1 lakh (1 lakh = 100000 rupees) car began in 2003, under the Chairman

of Tata Motors, Ratan Tata. The strategy behind the project was the awareness of the number

of Indian families who had two wheeled transport, but couldn't afford a four wheel car, and

was based on the company's success in producing the low cost 4 wheeled Ace truck in May

2005.

The Nano was unveiled at the 2008 New Delhi Auto Expo.

Industry convention was that a reliable car couldn't be made at such a low price, so

initial media speculation was that the car would be a simple four-wheeled auto

rickshaw. However, The Times of India reported that the vehicle is "a properly

designed and built car". The Chairman is reported to have said, "It is not a car with

plastic curtains or no roof — it's a real car." During development the company

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reinvented and minimized the manufacturing process, brought in innovative product

design, and asked component manufacturers to look

at current work and design approaches in a different perspective to produce logical and simple

solutions. The car was designed at Italy's Institute of Development in Automotive Engineering,

with Ratan Tata ordering certain changes during the process, such as reducing the number of

windscreen wipers from two to one.

Financial projection:

Tata initially targeted the vehicle as "the least expensive production car in the world" —

aiming for a starting price of 100,000 rupees or approximately $2300 US despite rapidly

rising material prices. Tata Motors has been able to cut down the cost of the car by

making things smaller and lighter, doing away with superficial parts and changing

material wherever possible. Tata Motors company had received lakhs of enquiries

through the internet for the Nano.

Tata Motors intends to open bookings for the car three months from now. Tata Motors

plans to produce 2,50,000 Tata Nano Cars in the first phase and add 1,00,000 in the

second phase, taking the total production capacity to 3,50,000 cars probably by the end

the next financial year

As of August, 2008 material costs have risen from 13% to 23% over the car’s

development, and Tata now faces the choice of introducing the car with an artificially

low introductory price, raising the price of the car, or foregoing profit on the car — the

latter an unlikely proposition., while an increased price on the Nano will likely decrease

demand

Technical overview:

Design

The People’s Car, designed with a family in mind, has a roomy passenger compartment

with generous leg space and head room. It can comfortably seat four

persons. Four doors with high seating position make ingress and egress

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easy. Yet with a length of 3.1 metres, width of 1.5 metres and height of 1.6 metres, with

adequate ground clearance, it can effortlessly manoeuvre on busy roads in cities as well

as in rural areas. Its mono-volume design, with wheels at the corners and the powertrain

at the rear, enables it to uniquely combine both space and manoeuvrability, which will

set a new benchmark among small car

Engine

Unlike other low cost Indian cars, this one is going to have a variomatic gear system.

Instead of manual gear box in conventional cars it is coming up as gear less or rather

with an automatic gear transmission. This helps to improve the efficiency & mileage by

magnifying the torque output.

As in international markets, the compact car from Tata will have back mounted engine,

pushing the luggage space to the front. Making the engine closer to the fuel tank has

another advantage of increased fuel efficiency. Rear mounted engine also help in

reducing the power loss during transmission. The car will have front disk and rear drum

brakes. The company claims mileage of 22 kmpl in city and 26 kmpl on highway.

Fuel Efficiency

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The People’s Car has a rear-wheel drive, all-aluminium, two-cylinder, 623 cc, 33 PS,

multi point fuel injection petrol engine. This is the first time that a two-cylinder gasoline

engine is being used in a car with single balancer shaft. The lean design strategy has

helped minimise weight, which helps maximise performance per unit of energy

consumed and delivers high fuel efficiency. Performance is controlled by a specially

designed electronic engine management system.

Safety & Comfort

By adhering to the fact that less weight requires less power, the 1 lakh car is made of

light weighing steel. This has made the Tatas come up with a cheap alternative with out

compromising on safety and performance. The base model will feature glass windows

that can be cranked up. The tail lights are expected to appear like as in Tata Indica.

Higher versions will have the comforts of power steering, power windows, air-

conditioning and much more. With an all sheet-metal body, it has a strong passenger

compartment, with safety features such as crumple zones, intrusion-resistant doors, seat

belts, strong seats and anchorages, and the rear tailgate glass bonded to the body.

Tubeless tyres further enhance safety. It

exceeds current regulatory requirements with a strong passenger compartment, crumple

zones, intrusion resistant doors, seat belts, strong seats and anchorage

Controversies Involved

Controversies also arose about Tata's planned manufacturing unit for the car in Singur,

West Bengal, where the state government of West Bengal has allocated 997

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acres (4.03km²) to Tata Motors. The construction of the car

factory on that tract of land will require fertile agricultural land and the expropriation

and eviction of ca. 15,000 peasants and agricultural workers. The affected farmers fear

they will receive inadequate or no compensation and therefore lose their livelihoods.

Activists near Kolkata, where Tata's manufacturing unit is located, started burning the

car in effigy. In New Delhi, a group of six women protested wearing T-shirts bearing

slogans that said, "The Rs 1 lakh car has Singur people's blood on it." The Trinamool

Congress alleged that Tata motors usurped the agrarian land for the construction site and

has threatened to stall the manufacture of

the car. The 11 cases were dismissed.

The Nano is alleged to have severely affected the used car market in India, as many

Indians opt to wait for the Nano's release rather than buying used cars, such as the

Maruti 800 (a rebadged Suzuki Alto), which is considered as the Nano's nearest

competitor. Sales of new Maruti 800s have dropped by 20%, and used ones by 30%

following the unveiling of the Nano.

It will be a tragedy if such a mega investment and employee generating project by one

of India’s most respected company is lost to West Bengal on account of a failure of

communication among its stakeholders. It’s time that we as a nation begin to think of

such projects as national projects and not become captive to immediate impulses. There

cannot be and must never be any contradiction between industrialisation and welfare of

farmers.

In a democracy, the sensitivity of all stakeholders have to be addressed and in the

context of land acquisition controversies, the new law of land acquisition and

rehabilitation, proposed by the UPA government, is the way forward. If the Tata

withdraws from the Nano project in West Bengal, investors’ sentiments will be hurt, and

the only way for the company to move forward is for all concerned to ensure a political

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atmosphere conducive for investment. The Nano has 34 patents on the car’s design

itself, which is a cause for national celebration as it represents a major technological and

manufacturing feat in the automotive sector. All projects of technological excellence and

originality that give India a special place in innovation and unique competitive

advantage, should be treated as national projects. The state government should ensure

the farmers are justly compensated in terms of price for their land and employee

opportunities in the car project through suitable policy initiative. Democratic

government is all about dialogue and moderation, and we hope that the West Bengal

government will initiate purposive dialogue with all concerned. After all, his unfortunate

controversy must be resolved to the satisfaction of all

stakeholders through dialogue alone.

Latest At Singur:

In Tata Motors’ long term interests Singur has become a flash point and a hot bed for

political activity. The average Indian will however be synonymous with Singur as the

chief production facility of the World’s cheapest car. The much talked about 1 lakh

people’s car or the Nano. This statement is the first clear indication by Ratan Tata that

he isn’t interested in dealing with the violent politics of Singur. Ratan Tata is not the

type of man who uses the media to play around which means that today’s statement is a

forecast of what will happen unless things change at ground zero in Singur. For

investors and shareholders of Tata Motors, this is a major development which could go

either way for them and simultaneously their investments. If Tata Motors decide to

move out then almost 2 years worth of work will have to be re-started somewhere else.

Despite Tata’s confidence that they are capable of rolling out the Nano by October,

future production will be hampered if they are forced to shift their project elsewhere.

Singur has become a political issue between the government and the opposition over the

government’s ‘capture’ of Farmer agricultural land. While the opposition alleges that

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some land has been forcefully acquired, while for some adequate compensation has not

been paid; the

important fact remains that violent methods are being used to deal with the situation.

Farmers protesting the Tata plant have resorted to beating up the staff of the Singur

plant .Serious bodily damage has been inflicted on the staff and family members of Tata

Motors at Singur. This has been the main reason why Tata might very well pull out of

Singur. For the state housing the Nano project, things are serious for West Bengal. The

Nano project at Singur has put in around 1500 crores and will pump in even more once

serious production begins. For a state that is in need of heavy investment, a fiasco like

this will set a dangerous precedent and deter future investments by corporates in India

and the World. Tata Motors if booted out of Singur might make their way to the state of

Uttar Pradesh. Even Uttaranchal and Arunachal Pradesh with their lenient tax structures

could be unlikely gainers. There are also the special economic zones of Gujarat and

Karnataka that hold promise. If Tata decide to move, investors can take heart from the

fact that despite delayed production and eventually sales, the Nano will still find takers.

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RESEARCH METHODOLOGY

Objectives

• To know the present Consumer Perception about TATA NANO.

• Finding future potential for NANO.

Data collection

There are two types of data collection method use in my project work report.

-Primary data

-Secondary data.

For my project, I decided on primary data collection method for observing consumer

perception for TATA NANO and approaching customers directly in the field, comparing

and references to know their preference. In survey approach .I selected a questionnaire

method for taking a customer view because it is feasible from the point of view of my

subject & survey purpose.

I decided on secondary data collection method was used by referring to various

websites, books, magazines, journals and daily newspapers for collection

information regarding project under study

Sample size :- The sample size is 330

Sampling method:- The consumers are selected by the simple random method

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qestionnaire

Dear respondents,

I am a student of Shri Shankracharya institute of management & technology. As a part of my curriculum I am conducting a study on “consumer perception & future potential for TATA NANO ” It would be a great help if you please spare some of your time to fill this questionnaire. The responses would be kept strictly confidential & use to data analysis

A) Name -----------------------------------------------------

B) Age --------------------------------------------------------

C) Designation ----------------------------------------------

1. What is the first thing, which comes into your mind when you think about NANO?

a. cheapb. economicalc. affordable d. compact

2. Instead of purchasing a Bike, will you prefer to go for the NANO?

1. Yes2. No3. Can’t say

3. Which feature of NANO attracts you most, that inspires you to go for NANO?

1. Price2. Design3. Mileage4. Interior space5. All the above6. Can’t say

6. Do you think NANO is people's car?

1. Yes2. No3. Can’t say

7. Will you recommend NANO to your friends and relatives?

1. Yes2. No

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3. Can’t say

8. Which small car would you prefer to buy?

1. Maruti 8002. Tata NANO3. Other………………..9. How long can you wait for NANO?

1. 1-2 months2. 2-4 months3. 4-6 months4. Can’t wait

10. If the price of NANO rises, would you still purchase it?

1. Yes2. No3. Can’t say

11. Will Tata be able to maintain the price of NANO in future if there is hike in cost of raw materials?

1. Yes2. No 3. Can’t say

13. Will there be traffic problem with the introduction of NANO on Indian roads?1. Yes2. No3. Can’t say

14. Can you trust NANO for safety?

1. Yes2. No3. Can’t say

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