Nano Tata-Logy: The People's Car

The case illustrates the opportunities, challenges and trade-offs involved in the design, prototyping, and marketing of the Nano – the People’s Car – by Tata Motors Ltd (TML), a Tata Group Company. The case is set nine months after the January 2008 unveiling of the Nano concept car in New Delhi, India. The company’s managing director faces multiple dilemmas in rolling the Nano off the production lines at the manufacturing plant in Singur, including growing local and global competition in the emerging low-cost, low-emission market, rising manufacturing costs, and stakeholder pressures.

The decision reviews critical developments in global automotive markets from the point of view of TML’s and Tata Group’s deeply ingrained values for sustainable economic development and Indian-grown competitive advantage. It plots the promise of a rampant market growth and the emergence of an India-based small car cluster against international outcry about the proliferation of urban transportation, congestion, and pollution in emerging markets (particularly India and China). Students are asked whether Nano is a disruptive or sustainable innovation for the company and the group, and respectively for the Indian and global automotive industry. Smaller and cleaner than its well-established rival in the west, the Toyota Prius, the Nano promises reliable, safe transportation to India’s emergent middle class as a fraction of the cost; the Nano is also 1.5-4 times cheaper than its Indian based rivals. However, production bottlenecks threaten Nano’s launch in the last quarter of 2008. Speculating that first mover advantage may sway customer perception and breed loyalty, several competitors are quickly setting up India-based manufacturing of competing models. Market projections estimate over one million adoptions, mostly by prior two-wheeler motorists, and limited switches from higher emission options for fuel and emission conscious consumers. The case addresses the issue of carbon neutrality, and more broadly the role of emerging market companies in addressing global climate change issues.