TATA NANO

4/2/2010

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1. For the global small car industry, analyse opportunities,
threats, key dominant features and industry driving
force worldwide. Outline “Tata Motors” strategies to
leverage/deal with these to build its competitive
advantage.
The impact of the severe downturn in the automobile industry during the
year 2009 was seen in the fall of major players like GM, Chrysler and Ford.
During these turbulent times the small car segment has seen substantial
growth and a rise in demand. The majority of growth in the global
automobile industry in the coming decade will come from emerging
economies such as India, China and Eastern Europe. And the largest
contribution to growth of auto market in these countries will be the fast-
growing small car segment. In India for example the small car segment
accounts for close to 70-80% of the total demand. In a recent research
published by CARE small car sales are foreseen to grow at a faster CAGR
of 15.8 per cent from 0.9 million units in FY 2008-09 to 2 million units in
FY2013-14. Even in countries like US, small cars are fast gaining
acceptance. Currently small cars account for just 2-3% of the markets in
these countries but this is set change in the coming years.

The small-car revolution is taking place within the context of the very
different needs and desires of the new consumer in emerging markets.
Consumers buying cars that cost $8,000 differ greatly from those buying
$15,000 cars. Those low-cost cars are typically their first, and they will be
used as family cars, but not for long-distance trips—instead, they will be
predominantly driven around town.

Opportunities:

1. Economic growth of the developing countries such as India, China,

Brazil, etc which has resulted in an increase in the demand for
automobiles
2. Low cost manufacturing in labour intensive countries that helps in
reducing costs and developing small cars

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 3. Rising fuel prices and depleting resources which is causing people to
move from gas guzzling automobiles to smaller and lighter fuel
efficient cars
4. Government incentive in countries like India to develop the small car
market
5. Rapid innovation in designing and manufacturing techniques that helps
in developing lighter vehicle models at lower costs

Threats:

• Western manufacturers have long had the luxury of highly developed

value chains, from product development to purchasing to
manufacturing to marketing, but that is by no means the case in
emerging markets. In these markets, the sophisticated infrastructure
available to Western manufacturers to back up the design and building
of cars—for instance, the large supplier base equipped with the latest
technology to do much of the component design—simply doesn’t exist.
• Environmental considerations like the CO2 legislation that is puts the
responsibility of emissions on the car manufactures will reduce the
profitability of small car (volume) producers
• Changing consumer preference in favour of bigger cars as small cars
are still seen as an entry level option
• Growing concern of the impact that a large number of small cars will
have on the infrastructure and environment
• Safety issues with respect to the crash tests that small cars can
survive
• The small car segment doesn’t find much takers in the developed
world where people still prefer luxury and safety over anything else.

Key determinant features:

• The buyers in this segment are generally first time buyers and their
main considerations are low cost and fuel efficiency
• The manufacturing of these cars generally happens in labour intensive
countries as this helps the manufacturers in reducing the costs and
passing the benefits to the customers. Countries like India, China and
Korea are thus the hubs of small car manufacturing.

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 • There is a lot innovation in that is required in the design and
manufacturing process which will help in reducing the costs
• There is stiff opposition from various quarters such as the
environmental groups. This is because of the fear that a larger number
of cars will adversely impact the environment due to emissions

Driving Forces worldwide

• While the developed countries saw GDP growth of just 2.2 percent in
2007, the so-called BRIC countries—Brazil, Russia, India, and China—
achieved an impressive 9.4 percent. Such rates of growth are bringing
rapid increases in prosperity throughout the developing world. With
that rise in prosperity, consumption patterns are changing
dramatically. Large swathes of the world are emerging from poverty
and entering the middle class, and the increases in income that are
driving that change mean these newly well-off people no longer must
spend the vast majority of their income on the bare necessities—food,
clothing, and shelter. Instead, they find themselves able to afford such
comparative luxuries as better healthcare, communications, and
transportation—including scooters, bikes, and, more and more
frequently, cars. Another thing which is noteworthy is the low labour
cost in emerging economies which is attracting hordes of
manufacturers to their soil.
• Rising income levels of middle class in the developing world and
reduction in the ownership cost with less expensive cars such as the
Tata Nano increase the demand in the small car segment and open up
new markets for car manufacturers
• The need for a second car by families apart from the big sedans that
can be used by households for their day to day activities within short
distances
• As oil prices rise and concerns about the environment grow, the small
car is becoming the king of the road. Nowhere is this more evident
than in the developing world, where increasing prosperity is bringing
millions of first-time buyers into the market for new cars. This presents
a tremendous opportunity for India, which is growing quickly, building
a vast middle class, and gaining experience in building and selling
cars. India can take advantage of its experience in this market to
become the world leader in the fast-growing small-car segment.

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 • Space constraints in most of the major cities in the world make it
difficult for owners to manage with a large car. They would rather
prefer an easily manoeuvrable small car
• The emergence of low cost manufacturing and design hubs helps the
company in reducing the costs and in developing smaller cars to cater
to the need of the domestic market
• Auto makers are looking to develop innovative financing and
ownership models in keeping with the needs of the emerging-market
consumer. Companies are putting together financing structures that
allow extended families to finance a car together. Alternatively, some
combination of bank financing and microfinancing could be used to
build up local markets.

Tata Motor’s strategy to leverage with these and build a Competitive

advantage

The chairman of Tata motors, Mr. Ratan Tata, recognized the fact that there
was an inherent need in the consumer’s mind for a car that was affordable
and functional. He thus built upon this idea and developed a strategy that
would help Tata motors create a blue ocean in the low cost car segment.
Some salient features of the strategy were

• The Indian passenger vehicle market is greatly tilted toward two-

wheeled motorcycles and scooters, which made up 78 percent of
vehicles sold there in 2007. That’s because India remains a poor
country, with projected median household income of just over $3,000
in 2008. Until the advent of the Tata Nano, the cheapest car sold in
India cost about $5,000, unaffordable for the average Indian family.
Nano’s price of $2,500, however, puts it well within the realm of
possibility for a much larger, and fast-growing, number of households.
• Tata Nano targeted young families-couples with 2 children, who could
not afford a car. They also targeted parents of college going students
as well retired people in order to leverage maximum popularity among
these segments which till now were untouched segments as far as cars
were concerned.
• The company followed a lean design strategy that helped minimise
weight in turn maximising performance per unit of energy consumed
and delivering high fuel efficiency

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 • The company tied up with the suppliers and ensured that they would
set up their manufacturing facilities in close proximity to the Nano
assembly plant. This helped in reducing the delays in the supply chain
and the vendors were entirely dedicated to supplying to the Nano
plant.
• The design of Nano was such that all extra accessories were removed.
Features such as one windshield wiper, smaller tyres and frugal
interiors helped reduce the overall cost of the car. Most of it came in
the form of institutional innovation which was encouraged at Tata
motors
• The modular design of the car helped in penetrating deeper into the
rural markets as this provided an opportunity for franchisees to be set
up who could assemble Nano and sell it
• One of the biggest strategic decisions was to price the basic model of
the car at a price point of Rs 1 lakh. Tata motors was thus able to
provide both differentiation and a low price without compromising on
either
• The low cost strategy also acted as a promotional strategy as the
launch of Nano was all that was needed to grab the consumer’s
attention.

1. What are the critical success factors for small car

industry? Analyse ‘Tata Motors Limited’ strengths and
weaknesses relative to its global competitors?

The critical success factors for a small car industry are varied:
• Affordability & Credit: In Indian terms even small cars are costly –
the average small car costs around 12 times average annual
disposable income. Affordability will restrict sales growth of larger cars
in the foreseeable future .Small, fuel efficient cars will remain the main
market. It is not only a matter of the cost of the vehicle in the
showroom, it is also the total cost of ownership. But what is changing is
that vehicle demand used to be driven by government, by institutions
and private companies – now it is being driven by private, middle-class
consumer demand. And for this set of consumers, affordability is the
key issue.”

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• Attitudes: Indians are savers, they are frugal, they are cost
conscious, and they are very driven by value-for-money, Most
companies believe that this means that medium sized cars will remain
hard to sell in volume – but that despite the conservatism of
consumers, attitude changes will drive small car sales.
• Growing working population-While the developed countries saw
GDP growth of just 2.2 percent in 2007, the so-called BRIC countries—
Brazil, Russia, India, and China—achieved an impressive 9.4 percent.
Such rates of growth are bringing rapid increases in prosperity
throughout the developing world. Consider India: At the turn of the
millennium, fewer than 500,000 Indian households earned more than
$15,000 per year; that number has since exploded tenfold, to 5.5
million households. Upward migration of household income levels, fast
paced urbanization (to rise from 28% to 40% by 2020) and middle
class expanding by 30 - 40 million every year are the major factors
which make India the global small car hub.
• Increased access to credit and lower interest loans- Increased
consumer embrace of financial products and easy availability of car
loans is another factor which has played a big role in success of small
car industry. Auto makers are looking to develop innovative financing
and ownership models in keeping with the needs of the emerging-
market consumer. Companies are putting together financing
structures that allow extended families to finance a car together.
Alternatively, some combination of bank financing and micro financing
could be used to build up local markets.
• Government support-The governments of emerging economies like
India are helping local suppliers increase both their capabilities and
their capacity by encouraging exports, providing capital to build
globally efficient scale, and offering incentives to invest in new
technologies. Finally, it is further developing the local supplier base by
encouraging foreign companies looking to do business in India to enter
into joint ventures and partnerships with local companies.
• Environmental concerns -High oil prices and concern for
environment are critical factors in success of small car industry. High
fuel and commodities prices are expected to be around for the
foreseeable future, and those prices will only make cars more
expensive to build and to run, thus reinforcing the desire to keep cars
small. Concerns about the environment and global warming are also

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 promoting the trend toward smaller cars—not just in the developing
world, but everywhere.

• Innovative technology -With the shift to smaller cars for emerging

markets, carmakers must develop new technologies and new business
models to meet the demands of these markets. Small cars must be
lighter and more fuel-efficient, so manufacturers are turning to such
technologies as alternate power trains, fuels, propulsion systems, and
braking systems, as well as materials not typically used in cars,
including plastics for exterior body components such as doors, and
strong, lightweight alloys and composites for structures.

Set up in 1945,Tata Motors is India's largest automobile company.With close

to 4 million Tata vehicles plying in India, since the first roll out in 1954, it is
the leader in commercial vehicles and the second largest in passenger
vehicles. It is also the world's fifth largest medium and heavy truck
manufacturer and the second largest heavy bus manufacturer. In India, the
company has manufacturing facilities in Pune (Maharashtra –western India),
Jamshedpur (Jharkhand – eastern India) and Lucknow (Uttar Pradesh –
northern India), and a nation-wide dealership, sales, services and spare parts
network comprising over 2,000 touchpoints.The company employs over
22,000 people.Tata cars, buses and trucks are being marketed in several
countries in Europe, Africa, the Middle East, South Asia, and South East Asia
and in Australia.Tata Motors has research centres in India, the UK, and in its
subsidiary and associate companies in South Korea and Spain.

Strengths of Tata motors:

• Strong Presence in the Marketplace-Tata Motors is the only

company in India with a broadbased presence across the industry, in
all segments of the commercial vehicles market – heavy and medium
commercial vehicles, light commercial vehicles, pick-ups, sub one-
tonne mini-trucks - and key segments - compact, midsize car and
utility vehicle segments - of the passenger vehicles market.
• Unique Understanding of Customer Need-With 50 years’ presence
in the automotive business,Tata Motors understands customer needs
and develops products that meet their needs.To consider a few

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 examples, as early as 1980s, the company launched Light Commercial
Vehicles, amidst Japanese competition, in which it today strongly
leads. In the 1990s, anticipating the need for an affordable family car,
it launched the now famous Tata Indica, which occupies a leading
position among compact cars.This keen sense of the customer pulse
led the company to launch in 2005, the Tata Ace, India’s first sub one
tonne mini-truck, as a last-mile distribution vehicle once again creating
a new market. Going forward,Tata Motors had anticipated that non-car
owning families, at the bottom of the pyramid, will look for an
extremely affordable vehicle, providing exceptional value and this
small car was Nano.
• Skill Base Developed Over the Last 40 Years-Tata Motors is also
very well-placed on technology capability.The company had set up its
Engineering Research Centre as early as 1966.With 1400 scientists and
engineers and state-of-the-art development, testing and validation
facilities, it is this technology capability which has, allowed Tata
Motors, over the decades, to offer indigenouslydeveloped
products.This strength has been accentuated, with the inclusion of
TMETC,TDCV and Hispano Carrocera in the R&D network, besides
several other specialist external agencies. The company no longer
needs to develop every necessity itself.Today it just has to manage the
process of product creation, drawing upon already available R&D and
skills from different sources.
• People Strength-The company’s key strength is its people.The over
22,000 employees comprise a very broad talent base, with the
required skills in every aspect of the industry. With increasing
international initiatives by the company, this talent base is now getting
enriched with the necessary competencies to respond to meet world-
class standards of quality and cost.

Weaknesses of Tata motors can be underlined in few cases. The company's

passenger car products are based upon 3rd and 4th generation platforms,
which put Tata Motors Limited at a disadvantage with competing car
manufacturers. Despite buying the Jaguar and Land Rover brands Tata has
not got a foothold in the luxury car segment in its domestic, Indian market.
The brand associated with commercial vehicles and low-cost passenger cars
to the extent that it has isolated itself from lucrative segments in a more

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

1. Analyse small car industry using porter’s five forces

model and value net. How does ‘Tata Motor Limited’
minimise impact of five competitive forces?

There is continuing interest in the study of the forces that impact on an

organisation, particularly those that can be harnessed to provide
competitive advantage. The ideas and models which emerged during
the period from 1979 to the mid-1980s were based on the idea that
competitive advantage came from the ability to earn a return on
investment that was better than the average for the industry sector. As
Porter's 5 Forces analysis deals with factors outside an industry that
influence the nature of competition within it, the forces inside the
industry (microenvironment) that influence the way in which firms
compete, and so the industry's likely profitability is conducted in
Porter’s Five Forces Model.

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BARRIERS TO ENTRY

• Time and cost of entry - Time is most essential thing while

launching a product inany market. The launch of the NANO is quite
viable as the demand of the small car is on the rise in the market. By
the cost of the entry we mean the initial capital required to set up a
new firm is very high, it makes the chances of the chances of new
entrants are very less.

• Knowledge and Technology - Ideas and Knowledge that provides

competitive advantage over others when patented, preventing
others from using it and thus creates barrier to entry. The TATA
motors have great knowledge/ experience in the automobile industry
and has renowned technological advantage because of the recent
acquisition and mergers.

• Product Differentiation and Cost Advantage - The new

product has to be different and attractive to be accepted by the
customers. Attractiveness can be measured in the terms of the
features , price etc. At this level the price of the NANO car was one
thing that is attracting customers. And above all this the image ,
trust the name TATA carries with it.

• Government Policy and Expected Retaliation - Although

government's job is to preserve free competitive market, it restricts
competition through regulations and restrictions. The government
tried to promote the TATA Motors to start a plant by providing land
and tax rebates. But the unexpected retaliation by the local people
surface in the setting up of the plant which costed the company a lot.

• Access to Distribution Channels - When a new product a

launched a well developed distribution is must for its success. The
TATA motors had a advantage of well established distribution
channel across the world

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BUYERS

• Switching Costs - If switching to another product is simple and

cheap the customers does not think much before doing it. In case
of NANO car the switching cost from bike to car is too high. Thus
increasing the demand of the car many fold.

• Number of customers/ Volume of sales - If there are few

buyers then they are able to dictate the terms. They pull down the
cost by Bargaining. The bargaining power of buyer is high as there
are lot of choice available to the buyer and the service do not vary
from one manufacturer to the other. They force the manufactures
to improve the quality. All this can be clearly seen in the case of
NANO car the price tag at which it has been offered or the quality
of the NANO car no compromise has been done at any front.

• Brand Image - The brand image of the TATA and the segment in
which the NANO has been the most attractive thing in the entire
package.

SUPPLIERS

• Number and Size of Suppliers - A company to manufacture its

products requires raw material, labor etc. If there are few
suppliers providing material essential to make a product then
they can set the price high to capture more profit. Powerful
suppliers can squeeze industry profitability to great extend. In
case of NANO the supplier are limited and the size of the suppliers
are parts of the NANO car are obtain from the supplier who them
are big enough and limited substitutes are available against them.
So the entire production line depends upon them only.

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 • Ability to substitute - Suppliers' products have high switching
costs. In many case even when substitute are available its not
that easy to opt for substitute as the next product in the assembly
line depends upon it. If the change in the any part is brought
about the long list of depended parts also have to be changed ,
which in most cases is not feasible to do.

SUBSTITUTES

• Price band - The threat that consumer will switch to a substitute

product if there has been an increase in price of the product or
there has been a decrease in price of the substitute product. If the
price of the NANO car will increase the main expected customers
ie the one switching from bike to car will not move to car and will
remain in the bike only. Thus the price is kept checked in this
manner.
• Substitutes performance - The performance of the substitute
sector will also play a important role in the success of the NANO
car. If the price of the Bike segment increases or the price band of
the small segment fall, it will have effect on the quantity required
in the market. Its just on the price but also the features and the
other services associated or it may be the status symbol story.
The success of the electric car segment with player like REVA can
also effect the demand of the NANO.
• Buyers willingness - Products with improving price/performance
tradeoffs relative to present industry products. It will determine
the willingness of the buyer to but the NANO car.The willingness
of the customers to go forward try the new product in the market
ie 'NANO'. They might be willing to go for the test products like
Maruti 800 , Santro etc.

COMPETITIVE RIVALRY

1. Number and Diversity of Competitor - This describes the

competition between the existing firms in an industry, the current
scenario, the small car market in India is very competitive with

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 players like Maruti Suzuki, Tata Motors, Hyundai etc. which was
pretty much dominated by Maruti. But with launch of Nano the 1
lakh car the whole momentum of the market has shifted. Now to
be competitive in market other companies have to either slash
rates of their existing model or have to go back to the drawing
board and build again.
2. Price Competition - Advertising battles may increase total
industry demand, but may be costly to smaller competitors.
Products with similar function limit the prices firms can charge.
Price competition often leaves the entire industry worse off. NANO
is the only player so it has the price freedom but as the Maruti
and Honda are also planning to launch the car in the same
segment the price competition will start
3. Exit Barriers - Even if the product fails in the market its not that
easy for the company to exit the market just like that because of
the heavy investment it has made in the initial stage. If the NANO
fails or falls flat the TATA motors will not be in a state to slow
done the product even when NANO production line can be used
by the other products after few modification as for NANO only the
new product line were setup and huge cost were incurred.
4. Product Quality - Increasing consumer warranties or service is
very common these days. To maintain low cost, companies
consistently has to make manufacturing improvements to keep
the business competitive. This requires additional capital
expenditure which tends to eat up company's earning. On the
other hand if no one else can provide products/ services the way
you do you have a monopoly. NANO enjoys the monopoly are
there are no competitors in this segment.

4. Draw ‘Tata Motors Limited’ value chain and

outline how it helps build in competitive
advantage?

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Inbound Logistics
• Long term contract with service provider's -transporters and
agents.
• Personnel at regional offices for over seeing the smooth transit
of goods.
• Transparency and monitoring through deployment of IT- all transactions
through SAP.
• DTL supplies for critical high value items.
• Efficient storage facilities - easy storage and retrieval.

Operations
• Capital Equipment Manufacturing division - tooling
development capabilities of global standard.
• Apprentice Trainee Course - ensuring stable source of skilled
manpower.
• Kaizen & TPM team - continuous drive to improve efficiencies.
• Automated manufacturing processes.

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• Distributed manufacturing -Assembly units at South Africa,
Thailand, Bangladesh, Brazil etc.
• Maintenance-technical competence.
• Capacity Utilization

Outbound Logistics
• Stockyards, all across the country.
• Long term contracts with transporter's - higher volume of business to
transporters ensures competitive price.
• Regional Sales Office and Vehicle Dispatch Section linked through SAP.
• Efficient security system for prevention of any kind of pilferage.

Marketing & Sales

• Structured approach to understanding the requirements of individual
customers - QFD's conducted at regular intervals.Clear identification of
product requirements, leading to development of innovative products -
Tata 207 Dl, Tata Ace
• Pan India presence and global footprint.
• Independent teams for addressing the requirements of institutional
customers - Defense, State Transport Units
• Helping to augment the scarce resources - Fiat selling vehicles through
Tata dealerships, in return Tata has access to Fiat's technology and
unutilized capacity.
Service
• Easy availability of spare parts.
• Efficient collection of data from field and communication to the
respective plants.
• Pan India presence, as well as global presence.
• Large network of workshops - Dealer workshops and TASS.
• Training facilities - for dealer end and TASS personnel.
Procurement
• E procurement initiative.
• Global Sourcing Team - China , a key destination for sourcing essential
items like tires, power steering units etc., Steel procured from Belarus
• Long term relationships with a stable and loyal pool of suppliers.
• Technology driven procurement - SAP and VCM.
• Strategic subsidiaries & JV's - TACO group of companies ,

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 Tata Cummins
• Centralized Strategic Sourcing for key components -FIP's, Steel etc.
• Group resources -Tata Steel and Tata International
Technology Development
• Approximately 2% of the annual profits of the company invested in
research and development.
• Knowledge portal - helps employees keep abreast with the latest
technologies.
• Extensive prototype building and testing facilities.
• Strategic partnerships - MDI (France), Fiat etc.
• Formal benchmarking process.
• "Technology Day" organized across all plant locations.
Human Resource

• Vast pool of technically competent engineers and managers.

• Focus on development of technical capabilities -Technical
Training Center's, Alliance with technical Institutes
• Focus on development of managerial capabilities -MTC's , TMTC,
executive training programs at premier business schools
• Career advancement schemes - ESS, FTSS
Firm Infrastructure

• Multi - Location facilities

• Strong leadership - under the aegis of Tata Sons
• Best in class prototype building facilities
• Technology - SAP
• Large product portfolio
Key Strategies
International strategy based on the competitive advantage:

• New product (eg. Tata Nano, the cheapest car in the World).
• Acquisitions (eg. Land Rover and Jaguar brands from Ford Motors).
• Partnership with established companies (eg. Alliance with Fiat since
2006) to enhance the product portfolio and knowledge exchange.
• Facilities for learning from other companies.
• Developing programmes for intensive management development.

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5. What are the current and emerging challenges
for Tata Nano and your recommendations?

In January 2008, Tata Motors launched Tata Nano, the least expensive
production car in the world at about Rs. 1,00,000 (US $2,500).The city car
was unveiled during the Auto Expo 2008 exhibition in Pragati Maidan, New
Delhi. Tata Nano Europa has been developed for sale in developed
economies and is to hit markets in 2010 while the normal Nano should hit
markets in South Africa, Kenya and countries in Asia and Africa by late 2009.
A battery version is also planned.

A few challenges faced by Tata Nano are:

• Tata has faced controversy over developing the Nano as some

environmentalists are concerned that the launch of such a low-priced
car could lead to mass motorization in India with adverse effects on
pollution and global warming.
• The Tata Nano uses plastics and adhesives rather than welding, to
reduce cost. There is no radio, no passenger side mirror and only one
windscreen wiper. If you want air conditioning, which you just might in
India’s oppressive summers, you will need to get the deluxe model.
And it is not going to be hitting the export market any time soon – the
cost of meeting US safety requirements would double the cost of the
car – but it is a pretty good replacement for those who currently
precariously cram the family onto a motorbike, as many do.
• One of the problems facing Tata Motors is that, while the Nano's long-
promised price has stayed the same, costs for raw materials have gone
through the roof. Even as oil retreats from a high of nearly $150 per
barrel, the chances of Tata Motors squeezing a drop of profit out of a
$2,500 Nano is highly unlikely. Choosing a single culprit for this is
impossible, since escalating material costs have raised the price of

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 everything from corn flakes to crude oil. Focusing only on the Nano's
steel exterior, it's clear how difficult it will be for Tata to stick to that
$2,500 price for long.
• Protests over the land acquisition methods used by Tata Motors began
on Aug. 24, led by Mamata Banerjee, chief of the Trinamool Congress
political party.This led Tata Motors to shift its manufacturing plant to
Gujarat. While currently the political tensions have subsided, there is
no guarantee that in future land acquisition row would not lead to
another full fledged political war.

While the company has long touted its lineup of cars as cheap, safe and fuel
efficient, Tata has had challenges, including production delays, mechanical
problems and questions about profit margins. Most recently, a Tata Nano
burst into flames just as it was driven out of the showroom. Although the
incident raised concerns about the safety of the Nano, the company said it
believes it was a one-time event. A year ago, three customers also
complained that their Nanos had started to smoke. (The smoke was
reportedly caused by a short circuit that led to plastic parts smoking from
the heat. Tata replaced the supplier of the faulty part.).

A few recommendations for Nano:

1. Increasing global presence – Nano must show more presence in the

developed markets apart from the developing ones since people are
becoming more sensitive towards Environmental issues and of course
they want to spend less on fuel guzzling cars.
2. Full scrutiny of technical failures – The recent technical failures must
not be taken lightly and cars must be called back to fix the problems
before the issue blows into a full fledged controversy and mars the
Nano brand.
3. Political issues and Land acquisition- More transparency should be
there in land acquisitions for building plants. Local people must be
taken into confidence before embarking on building plants in the area.
4. The brand needs more of advertising and promotion which it is
currently lacking. The low cost must not compromise on quality. Easy
loans must be made available to those who wish to own this car.

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 5. The automotive industry is a B2B (business-to-business), B2C
(business-to-consumer) industry involving large investments and a
long-term return on investment plans. New product launches on time,
on Budget, and focussed on the target segment will be critical to the
future success of OEMs and suppliers across all segments.

Volatile raw material and input costs, especially oil and steel, will continue to
have a pervasive impact on the operating profitability of OEMs. Successfully
managing supply chain complexity, implementing low-cost country sourcing
strategies, and continuous technological innovation will be vital to achieving
long-term cost mitigation goals.

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