Tata Nano's non-nano sized problems

I don't think there's any doubt on the Tata Nano being a social leveller, in that it will now allow the 'lower middle class' in India access to a car. Its about time this consumer set avail the benefits a car brings, especially since their previous rides had the whole family balancing precariously on a two wheeler.

Beyond the social implications, lie the business ones. As Prof. Sekhar was musing this morning, will the Tata Nano be financially sustainable in the long run, wafer thin margins and all? If volumes are the key does Tata have the capacity to build the kind of scale that can produce the volumes? Now, these aren't nano sized problems.

About the BusinessWeek article titled, 'What Tata Nano can teach Detroit', note what Jayadev has to day, 'Before we look at Detroit, shouldn't we first look at what can Tata's Nano teach Tata? The car is barely on the roads (and we don't even know yet if the car will fall apart in 3 years like the initial Indicas did) and Business Week seems to think it has lessons to teach Detroit? Working backwards from a price point is not a radical proposition as this article seems to make out. It is just another pricing mechanism that is common in several business models. Detroit makes what America wants and Tata makes what India wants. There is no comparison between the wants of either nation. The Ford F-150 is the largest selling automobile in the US precisely because Ford knows what America wants.'

Well, I for one believe he has a point! I guess the mass adulation for the Nano, justified for the moment, will be called to question, in the coming months. For the sake of the social movement that the Nano is, I hope and pray it succeeds.


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