When Tata Motors rolled out an
inexpensive compact vehicle in 2009, the carmaker heralded the car,
saying it would change the lives of millions of Indians, particularly
among its aspirational middle class.
Although Tata Motors’ revamped Nano Twist now boasts modern features
such as power steering and remote keyless entry, it needs stronger
marketing to attract buyers. --
But the egg-shaped car, the Nano, failed to impress and sales have
been sluggish, undercut by an image of poor quality and underwhelming
power.
Now, Tata Motors is trying to revive sales by remaking the Nano for a younger, more affluent consumer.
The Nano Twist, which started appearing in showrooms in January, has
more modern features such as power steering, a stereo with Bluetooth
technology and remote keyless entry. But it remains to be seen whether
the revamp will entice buyers.
The Nano Twist's higher price tag alone may be tough for consumers
to swallow. The new car sells for about 236,000 rupees (S$5,000),
roughly double the price of the original car. And it is also unclear
whether Tata can take market share from established competitors such as
Maruti Suzuki, Chevrolet and Hyundai, all of which offer similarly
sized vehicles.
Mr J. Basu, a writer based in New Delhi who researched extensively
before buying, said he chose a small car from India's largest carmaker,
Maruti Suzuki, because it was more powerful, had better acceleration
and offered more legroom than similar cars in his price range.
"It was better value for money. Somewhere along the way, the Nano lost the plot," he said.
Tata Motors had an ambitious vision for the original Nano. The car,
which weighs about 590kg, not much more than a grand piano, was
marketed to consumers looking to upgrade to a car from a motorbike.
The problem, analysts say, is that India's first-time car buyers
were not just looking for an inexpensive car. They also wanted a car
that was cool. The Nano's 624 cu cm engine - smaller than the engine in
many motorcycles - did not perform well on highways or hills. So the
Nano failed to resonate with first-time car buyers spoilt for choice in
a country where most of the world's top carmakers sell small hatchbacks
too.
Auto analyst Deepesh Rathore, co-founder and director of Emerging
Markets Automotive Advisors, wrote in a recent report on the Nano:
"Customers found the build quality short of expectations, the fuel
efficiency mediocre and the car not holding itself well with age. The
highway performance was short of required and the acceleration sluggish.
"The Nano was somewhere between a car and a two-wheeler, both in
terms of price as well as performance. That was not what the customer
had been expecting."
Reports of several Nanos bursting into flames in 2010 also hurt
sales, although the company insisted there was nothing wrong generally
with the model.
Tata Motors says its cars meet all safety standards. "Safety is of
paramount importance to Tata Motors. All our vehicles, including the
Tata Nano, meet all Indian safety regulations "as mandated by the
government", a company spokesman said in an e-mail. Citing company
policy, she declined to be identified.
Such disappointments came at a tangible price for Tata Motors, which
also owns the Jaguar and Land Rover luxury brands. Sales have been far
lower than the capacity of 250,000 cars a year at the Nano plant in the
western state of Gujarat.
According to company figures, cumulative sales fell to 21,129 in
2013-2014, from 53,848 in 2012-2013. In one particularly bad month,
November 2010, only 509 cars were sold.
Said Mr Ranjit Yadav, president of passenger vehicles at Tata
Motors: "It got slotted as a cheap car, which was not a great place. It
did not fail, it did not hit the imagination of the consumers. They
wanted more."
Tata Motors hopes it can reposition the Nano to reach out to younger
customers or people looking for a second car. For instance, it is
pushing the Twist as a college graduation gift and trying to use terms
such as "cool", "peppy" and "fun" to describe it, a spokesman said.
Mr Yadav said the new model had bumped up Nano sales by 10 to 15 per
cent in the past two months. "The Nano story has been a journey with
Ratan Tata's vision of affordable mobility," he said, referring to the
former chairman of Tata Group who helped the company expand its car
business.
"Over the past four or five years, the market has evolved, including
the customer. We're repositioning the car as a smart city car aimed at
the smart city buyer, unlike the earlier model, which was more
affordable transportation."
He added that in the past five or six years, the proportion of Tata
buyers from 24 to 34 years old had expanded to 40 per cent, from 15 to
18 per cent.
Mr Yaresh Kothari, research analyst at the Indian investment firm
Angel Broking, said the Twist had a long way to go before it could be
considered a legitimate challenger to the country's most popular small
car, Maruti's Alto. About 25,000 Altos are sold each month, starting at
315,000 rupees.
By comparison, Tata Motors is selling more than 1,000 Twists a
month. Mr Kothari said of Tata Motors: "The real success is when the
company is able to sell 7,000 to 8,000 a month, or even 10,000."
Some car experts say Tata Motors needs to change its message. Mr
Rathore says Maruti Suzuki has thrived because of its clever marketing,
especially in rural areas where the company chooses moments such as a
post-harvest period, when farmers are flush with funds, or the wedding
season, to market its cars there.
For the Nano Twist, "the situation is still quite bleak. Nothing has changed on the ground", he said.
He added: "The new model has to be substantially better than the
present car. They will have to give a more convincing argument to
customers and say, 'This is not the Nano but a whole new car'."
In the end, Tata Motors will have to find more fans such as Mr
Abanindra Chaudhuri, 65, who lives in the eastern city of Kolkata. He
bought a Nano in 2010.
"It's the cheapest car in India, its petrol consumption is very good
and it has space for four or five people," he said. "It's easy to
manoeuvre and easy to park."
