Tata Nano :The Peoples car that promises to reconstruct the Automobile

Industry

Nagender Singh YadavS-46Source: INSEAD: Blue Ocean Strategy Institute

Author Introduction

• This case written by Dr. Robert Bong & Dr. Mi Ji both professor of strategy at INSEA (The business school, Blue Ocean Strategy Institute)

Robert BongDr. Ji Mi

Author Introduction

Robert Bong (Singapore)

Domain of expertise:

China, India, Indonesia and Malaysia. Public Private Partnership, Entrepreneurship & Start-up, Education and Technology & IT Services Advisory

Dr Robert Bong, currently the Chief Advisor of the Malaysia Blue Ocean Strategy Institute (MBOSI); a public policy advisory and public private partnership (PPP) consulting firm, is former Chief Executive Officer, Managing Director and Director of a number of publicly listed companies, and Rector/Vice Chancellor/Chief Executive of universities, has close to 40 years of global experience in corporate leadership in USA, India, China and the ASEAN countries.

Author Introduction

Domain of expertise:

Consultant for Blue Ocean Strategy

Dr. Ji Mi is currently an Institute Executive Fellow at the INSEAD Blue Ocean Strategy Institute (IBOSI) in Fontainebleau, France. She began to work for the authors of Blue Ocean Strategy – W. Chan Kim and Renée Mauborgne in 2001 and was the official translator of the Chinese version of the book, which topped the bestseller list and won numerous awards in China. Mi holds a Ph.D. in Government from Cornell University, an MBA from INSEAD, and a B.A. from China Foreign Affairs University.Before joining the IBOSI, Mi was a professor of International Political Economy at the School of International Studies, Peking University.

Dr. Ji Mi

The TATA Group : Company History

• Founded by Jamsetji Tata in 1868 as trading company

• First steel mill, power utility, luxury hotel and international airline

• By 2011, 98 companies over 7 sectors.• Company seen as Inspired trust & a strong

commitment to ethics • By TATA Code of Conduct, TATA promised to

improve the quality of life and Nano is a prime example.

The Dream

I observed familiesriding on two-wheelerthe father driving thescooter, his young kidstanding in front ofhim, his wife seatedbehind him holding alittle baby. It led me towonder for such a carwhich is safe & affordable to any middle class family.

INTRODUCTION OF TATA NANO

“Dream-dream and dream, because dream gives vision, vision gives thoughts and finally thoughts lead to the action". Each letter of these motivational words said by India's former President Dr. A.P.J. Abdul Kalam goes exactly with Mr. Ratan Tata, Chairman of Tata group, who in the year 2003, introduce a affordable car for the common people. Innovatively planning to form one more series of Nano Dc.The Nano Dc has created a completely new category and continues to innovate in line with the evolution of the market.The awesome spirit of the Nano Dc - of living life on your own terms - is depicted through the colourful world of Nano Dc and the people in this world who share the brand's unique attitude - to do things bigger, better, and differently.

The automotive industry in india• Automobile industry flourished with an average growth rate

of 17 percent annually post liberaliszation• In 2009 industry produced more than 11 million vehichles

Case Time Line

•The Dream (Idea)2002•Tata Nano Unveiled at AutoExpo, New Delhi2008•Tata Nano Commercial launched2009

Advantages of NanoComparison of Nano with Maruti 800

Nano was 4% Wider14% Taller21% more interior space, Weight only 600 KgsLowerst Carbon Emission (101grams/Kg)

Tata Nano was conceived to appeal to vast population of 2-Wheeler owner which were neglected by automobile Industry

• Aim to provide• Safe• Comfortable• Reliable• Economical• Decent

Cost Innovation

• Electronic Control Unit (ECU) have 1700 parameter as compared to average 5500

• No seat Frame, 3 Fixed Position• Door Handles designed with 70% fewer parts• Low Cost Wheel Alloy• Fuel Inlet Cap was placed under the nose of

car to avoid need to cut hole in body• No need for power steering

Challenges

• Upward revision of raw material cost in year 2008 in range from 40% to 200%

• Aggitation by locals of place where plan is located (Singur, West Bengal)

Rs. 15,000,000,000 was spend• Tata is forced to shift to Sanand in Gujrat• Undertook 75% of relocation cost of ancillary

manufactures

Challenges

• As against the prediction of 20K to 25K Nano’s per month there were only 10,475 per month

• Perception of Cheapest Car in place of Peoples Car, Stigma attached with cheap car

22 January 2014 ISTE VESIT maximus 16

RELAUNCHINGnan

22 January 2014 ISTE VESIT maximus 17

Problem 1- Price is the Identity

22 January 2014 ISTE VESIT maximus 18

Introducing New Engine

Be a Part Of NANOLUTION