Why Tata Decided to Manufacture "Nano"?

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Why Tata Decided to Manufacture
Bangalore: With international cars over-flooding the car market, it was still the dream of many Indians to afford one for their family. And Ratan Tata brought the dream come true with the launch of Nano. He had a dream to bring an affordable transportation solution within reach of the masses. In 2008, the Financial Times reported: "If ever there were a symbol of India's ambitions to become a modern nation, it would surely be the Nano, the tiny car with the even tinier price-tag. A triumph of homegrown engineering, the Nano encapsulates the dream of millions of Indians groping for a shot at urban prosperity." Nano has become a status symbol in the home market, where it provides an opportunity for new car ownership for people who would otherwise never own one. The opportunities in the overcrowded car manufacturing space are limited for new entrants, as every car manufacturer focused on good quality, better performance and macho look, the end result of which was a car worth several lakhs. Even with so much of specialized and improved performance, the users are not able to extract the maximum advantage do these features due to several limiting factors such as traffic jams, speed limits and safety concerns. And if Tata would have entered this premium category, it needed to face a lot of competition for its survival. But, Tata understood this opportunity and decided to enter the not so premium segment and address the pain point of millions of Indians who wanted to enjoy a part of luxury with their family rather than riding on a scooter totting one-upon-another. Ratan Tata announced to launch a car worth a lakh in the year 2003 and finally succeeded in keeping his promise by launching Nano on 10th January 2007 at the Ninth Auto Expo 2008 in New Delhi. Since then, it has been bringing revolution in the life of the people and the economy of the country by boosting entrepreneurial-opportunities across the country, as well as expand the Indian car market by 65 percent. The entire concept to build a car worth a lakh conceived in Ratan Tata's mind when he saw a family of four on a scooter with a child clinging onto mother's arm at the rear and another child to his dad at the front of the scooter. There was a splash of water on to the children faces and they shrieked. After seeing this, Ratan decided to build a car that will be affordable to such families to provide a safer alternative transportation for scooter owners. But, an emotional touch is not enough for a private organization to launch a product. Ratan got an opportunity market research conducted. After verifying the result, Ratan knew that it would be difficult for Tata to enter the premium segment and sustain, as it will be under huge financial pressures as other car manufacturers had deeper pockets and strong position in the market. He decided to take the war to a new battlefield that would provide an equal chance of success with the big automobile honchos. Whatever may be the reason behind launching a Nano, but it has definitely brought a dream to reality for the scooter owners by bringing the car into their budget. Ratan built a small team of engineers to minimize the number of non-essential features, reducing the cost of steel used in its construction and relying on low-cost Indian labor. Even though, during the launch of Nano, Ratan could not succeed in launching the car at the price he promised, which was due to several reasons, it made succeed in creating a drone among the automobile honchos. They were trying hard to trace out the technologies that resulted in the creation of a car worth something more than a lakh. With Nano becoming a big hit in India, it also succeeded in creating a buzz in several other countries of the world, especially Europe. And China, which is more famous to push in their cheap products to other countries are thinking of using Nano as taxi in their country.