What should a brand new vehicle cost? And more importantly, if you were an executive in India in a country where the majority of people do not make a lot, How much would you value the new car so that you could create an item that almost everyone could buy? They thought that the product management team at Tata Motors thought they could answer this question that the $2,000 Nano was created to capture the Indian automobile market. But it didn’t. What was wrong?
How Is The Nano?
Before we discuss the reasons why the Nano product was a failure, it is probably time to discuss what exactly it is that the Nano is. It was in 2009 that Tata Motors introduced the Nano to the world. The Nano was advertised as the “cheapest production vehicle worldwide”. It cost $2,000, and it was intended to be the first vehicle that consumers who wanted to buy a car from India and other emerging markets could purchase.
Tata has spent a significant amount of money in order to develop Nano. Tata spent a lot of money to develop the Nano product. They invested approximately $400 million to develop the product. Furthermore, they needed to shell out thousands of dollars more in order to design and construct a factory in which they could make 15,000 – 20.000 units each month. In April of 2012, sales of Nano Nano were at their highest, at around one thousand units per month.
What was the reason it was a flop?
As it was the time that Nano was being created, making sure that the price was to a minimum was an important aspect of the design definition. To meet this objective, the engineers had to leave a number of things in the Nano. The Nano does not have air conditioning or stereo and only one windshield wiper. Inside, there’s no glove box, and the seats are not padded and can’t be adjusted.
The result was a car was not wanted by anyone. What seems to have transpired is that people who are currently middle class want an affordable car, and they don’t desire a car that looks cheap. The result is that people are willing to buy a more expensive vehicle that has an upmarket appearance.
Nano sales Nano are currently at around 2500 per month. This means that much of the manufacturing facility designed to produce Nanos is idle. This is because the Indian economy is currently in a slump, and this hasn’t contributed to the growth of Nanos as well.
What Should Product Managers of the World Have Do?
It’s clear that it is clear that the Nano product managers have misjudged their customers. The majority of the issues they currently face could have been prevented. Utilizing focus groups or comprehension of the role an automobile would have on the daily lives of customers would have shown that the exterior appearance of the quality was extremely crucial. The product, as of now, does not look like something the product managers will be proud to have on their resumes as product managers.
Nano’s Nano product managers aren’t going to give up on their product. Instead, they are returning to the drawing boards and working on the next version that will be more popular. The things they’re doing consist of giving it a fresh look adding stereochrome trim hubcaps, increasing the cost and the launch of a new marketing campaign with prominent Indian entrepreneurs.
One of the most significant challenges which Nano product managers are likely to face is social pressure. In the event that someone buys the Nano, the person is likely to be subject to a large amount of pressure from family, friends and relatives about the purchase. They’ll be faced with questions like, “Why did you purchase the car?” Absolutely, that Nano management of the product has plenty of work to complete…
What does all Of This Mean For You?
Managers of the product at Tata Motors had a specific mission: to design a cheap cost vehicle that could be sold to the large majority of India’s automobile buyers. The car that was developed isn’t selling as well. What happened?
To keep the Nano’s cost low, The management of the product cut a lot of corners when they created requirements for this vehicle. They did not include radio and air conditioning, as well as one windshield wiper. It also did not have a glove box and was equipped with padded seats, which couldn’t be adjusted. The truth is that the buyers might have wanted a low-cost vehicle, but they didn’t wish to appear as if they had bought a low-end vehicle. The discovery of this should have been a feature of each Tata product manager’s job description.
Tata’s product managers are currently working on designing a new model of Tata’s Nano car. The new version will come with several extra features that will give it the appearance of it’s a much more expensive car. To implement these changes, they’ll also have to raise the price of the vehicle. We’ll check if they can do it correct the second time around!
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