How a twist in the Nano script is doing the trick

Its price tag was enough to make the world sit up and take notice. Ironically, though, this turned out to be the biggest stumbling block for the Nano in the years following its historic unveiling at the 2008 Delhi Auto Expo.

Even while the then chairman of Tata Motors, Ratan Tata, brought the house down when he announced the Rs 1-lakh price, customers did not quite share the sentiment when the car made its debut a year later. It was perhaps a case of a branding effort going horribly wrong with the market unwilling to be associated with a ‘cheap car’.

As sales of the Nano plummeted, Tata Motors knew that it was time to set things right. And this was when the Nano Twist, with overdue features such as power steering, made its debut early this year as part of the turnaround plan. More importantly, it cost over Rs 2-lakh which put it beyond the ‘cheap’ zone.

Makeover magic The prime objective was to go in for an image makeover from a basic car to a peppy, young and smart city commuter. And the results are beginning to show already. Where a lion’s share of customers for the old Nano was over 50 years old, today it is the age group of 24-34 (years) which accounts for nearly 45 per cent of the Twist’s sales.

What is even more heartening for Tata Motors is that 25 per cent of the car’s sales are happening in cash which pretty much reflects the new genre of buyers. The Twist is now sought after by the young college student or someone who has just bagged his/her first job. “The quality of customers coming to buy the Twist is diametrically opposite of what was happening with the Nano a couple of years ago,” a company official says.

Another interesting change happening in the Nano script is the growing base of women. Today, they account for 28 per cent of its customers, a substantial jump from 12 per cent in the earlier ‘people’s car’ phase. This has also been the impetus for working on an automatic version of the Nano which could hit the markets soon. “There will be more product changes down the road to transform the image of the car. You will not find a plain Jane Nano in our showrooms. We also want to play big on customisation initiatives,” the official says.

Work in progress Tata Motors is only too aware that it is going to be a long haul ahead for the car even while feedback from the market has been positive.

There are still legacy issues and the job on hand is to gradually obliterate the cheap car tag from people’s minds. Today’s young buyers are still seeking better interiors and more wholesome changes in the Nano while the power steering issue has thankfully been solved.

“The brand has taken a beating but it is on the way back to recovery. There needs to be a desire from the customer’s end to buy it and this happens when there is an emotional connect, which was never there with the old Nano. Once this is in place, the flow will happen but it is important to give a wholesome product and not cut corners,” the official says.

Tata Motors is also in no rush with a diesel version keeping in mind that the market is gradually getting back to petrol cars. The diesel frenzy lasted till a little over a year ago thanks largely to the fact that it was considerably cheaper than petrol.

Today, the price differential between the two fuels is barely Rs 15/litre and customers realise there is no point paying more for a diesel car unless they are doing something like 4,000 kilometres each month.

Monthly sales of the Nano are averaging 2,500 units, a far cry from the estimated two lakh units annually at the time of its launch five years ago. Today, the priority for Tata Motors is to build a base for the right quality customers and create an experience which will draw them to other cars from the company.

The following weeks will see the launch of the Bolt hatchback and Zest compact sedan which will be part of the new product positioning strategy.

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