Tata Nano: Marketing Research

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Do you think that Tata Motors will be a successful player in the global automotive market? If so why and if not why? How critical is Nano to Tata Motors?

We most certainly believe that Tata Motors will be a successful player in the global automotive market because (1.) of the skillfulness in contrivance in the concept stage to produce a vehicle well within its intended budget. The price of the vehicle has placed it in the mid-low target market which is where the economies of scale exist in emerging markets. It is a market not only in developing countries, but possibly for a low-cost car in developed markets; (2.) Tata Motors planned to export an upgraded variant of the Nano from India to other markets and build it locally. The primary targets for expansion beyond India were other emerging economies in Asia, Africa, and Latin America where safety and emissions standards were similar to India; (3). Tata Motors knows for the U.S., they need to produce a car that will have a larger engine, with additional crash tests, and modifications. They prepared themselves for the mission; and (4.) the aim was to create a ‘Nano Universe’.

According to the 2007 growth estimates based on sales of regular low cost cars and ultra-low cost cars in the range of $3,100.00 to $7,800.00, vehicles sold per year, regular and ULCC, will rise from 5.4 million in 2013 to 17.5 million by year 2020. This estimate includes China, India, the rest of Asia, South America, Africa, and the rest of the world. With this being said, there will be a continuous growing demand for low cost vehicles in this price range, globally speaking; However, the market outlook for the Nano is quite undesirable.

Analysis of the low cost car market reveals that the size of the market for ultra-low-cost cars in the price range of $2,500.00 to $5,000.00 is 2.3 million to 3 million. Even if some of the…...

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