“Consumer perception and future potential for TATA NANO.”
Submitted in partial fulfillment for the award of the degree
Master of Business Administration
Chhattisgarh Swami Vivekanand Technical University, Bhilai
MBA – Semester II
Shri Shankaracharya Institute of Management and
Junwani, Bhilai (C.G.) - 490020
This is to certify that the project “A study on consumer
perception and future potential for TATA NANO”
submitted to Shri Shankaracharya Institute of
Management & Technology, Bhilai in partial fulfillment
of the requirement for the award of Master of Business
Administration (MBA) is a bona fide work carried out by
Richa Vohra, a student of MBA II Sem, under my
supervision and guidance. The project was carried during
1.06.09 to 10.07.09 in Sairam Automobiles & Services
Mr. Narendra Sahu
SM. (Sairam Automobiles & services
I, Richa Vohra a student of MBA II Semester 2008, at
Shri Shankaracharya Institute of Management &
Technology hereby declare that this Project Report under
the title “A Study on Consumer perception & future
potential for TATA NANO” is the record of my original
work under the guidance of MR. NARENDRA SAHU.
This report has never been submitted to anywhere else for
award of any degree/diploma.
MBA – Semester II
It is a proud privilege on my part to express my sincere
and humble gratitude to all those people who have helped
me directly or indirectly in the completion of this project.
I thank venerated Mr.NARENDRA SAHU (C.M),
who gave me an opportunity to undergo my project in
Sairam Automobiles & Services and extend their valuable
help and guidance throughout my project.
I pay sincere thanks who spent his valuable time and
knowledge and gave me wholehearted support and
encouragement in carrying out this project.
I thank all those executives and non executives of
Sairam Automobiles & Services who spent their valuable
time in interacting and giving their personal time in
Finally, I thank all the team members for interacting
and sparing their valuable time with me whenever possible
M.B.A (2nd year)
7. TABLE OF CONTENTS
TABLE OF CONTENTS
1. INTRODUCTION TO THE COMPANY
1.1 Various product of TATA MOTORS
1.2 Shareholding patterns of TATA MOTORS
1.3 SWOT analysis of the company
2. INTRODUCTION TO THE TATA NANO
2.1 Financial projection
2.2 Technical overview
2.3 Vehicle summary
2.4 Supplies of TATA NANO
2.5 Controversies involved
8. 3. RESEARCH METHODOLOGY
4. DATA ANALYSIS AND RESULTS
5. INTERPRETATION OF FINDINGS
7. LIMITATIONS .
9. EXECUTIVE SUMMARY
Tata Nano is the cheapest car in the world. It is sold in home
country India around Rs 1 lakh i.e. approximately USD 2000. It is
manufactured by Tata Motor Limited, the largest to automobile
company in India. It’s Chairman, Mr Ratan Tata envisions that Tata
Nano become a “People’s car” which is affordable by almost
everybody. Tata Nano was first launched in India on 1 st April 2009
and expected to be in Indian market by July 2009. Since launching,
it has created a huge buzz all over India. Within the first two days of
lunching, it has received 5500 booking. The figures keep increasing
every day since the launching.
What makes Tata Nano so cheap? Basically, by making things
smaller, lighter, do away with superficial parts and change the
materials wherever possible without compromising the safety and
environmental compliance. It is said that Tata Nano has better
mileage than Toyota Prius and same gas emission as a scooter
Tata Nano will be imported to Malaysia by Tata Industries in parts.
It will be assembled in its two factories i.e in Shah Alam, Selangor
and Pasir Gudang, Johor Bahru. There are four distribution centres
in Peninsular Malaysia i.e. in Kuala Lumpur, Penang, Johor Bahru
and Kuantan. All Tata Nano cars will be distributed through these
distribution centres only. Order can. be made vide these distribution
centres or its web site.
There are three types of Tata Nano car available i.e. Tata Nano, Tata
Nano CX and Tata Nano LX. However, due to hot weather in
Malaysia, only Nano CX will be brought to Malaysia and will be
sold here. The selling price of Nano CX in Malaysia is RM 13,704
per unit. It is estimated that gross profit for the first year would
yield xxx, second year xxx and third year xxx Estimated monthly
instalment payment is xxx for seven years period. With this price,
the target market is very wide which includes those with income
RM 2000 per month, students female workers and scooters’ riders
11. INTRODUCTION TO THE COMPANY
Tat a Mot o r s Li m i t e d , formerly known as TELCO
(TATA ENGINEERING AND LOCOMOTIVE COMPANY), is a multinational
corporation headquartered in Mumbai, India. It is India's largest passenger automobile
corporation commercial vehicle manufacturing company. Part of the Tata Group, and
one of the world's largest manufacturers of commercial vehicles. The OICA ranked it as
the world's 20th largest automaker, based on figures for 2006
Tata Motors was established in 1945, when the company began manufacturing
locomotives. The company manufactured its first commercial vehicle in 1954 in a
collaboration with Daimler Benz AG, which ended in 1969 Tata Motors was listed on
the NYSE in 2004, and in 2005 it was- ranked among the top 10 corporations in India
with an annual revenue exceeding INR 320 billion. In 2004, it bought Daewoo's truck
manufacturing unit, now known as Tata Daewoo Commercial Vehicle, in South Korea.
It also, acquired a 21% stake in Hispano Carrocera SA giving it controlling rights in the
company. Tata Motors launched the Tata Nano, noted for its Rs100,000 price-tag, in
In March 2008, it finalized a deal with Ford Motor Company to acquire their British
Jaguar Land Rover (JLR) business, which also includes the Rover, Daimler and
Lanchester brand names. The purchase was completed on 2 June 2008 Tata Motors has
its manufacturing base in Jamshedpur, Pantnagar, Lucknow, Ahmedabad and
1. Hi s t o r y
12. Tata Motors launches its first truck in collaboration with Mercedes-Benz.Tata Motors is
a part of the Tata and Sons Group, founded by Jamshedji Nussarwanji Tata and J Baker.
The company was established in 1945 as a locomotive manufacturing unit and later
expanded its operations to commercial vehicle sector in 1954 after forming a joint
venture with Daimler-Benz AG of Germany.
Vario u s Pr o d u c t s of T A T A M o t o r s
 Passenger cars and utility vehicles
Tata Indigo SW
• Tata Sierra
• Tata Estate
• Tata Sumo/ Spacio
• Tata Safari
• Tata Indica
13. • Tata Indigo
• Tata Indigo Marina
• Tata Winger
• Tata Nano (3RD March 2009)
• Tata Xenon XT
• Tata Xover (2009)
 C o n c e p t vehi cl e s
• 2000 Aria Roadster
• 2001 Aria Coupe
• 2002 Tata Indica
• 2002 Tata Indiva
• 2004 Tata Indigo Advent
• 2005 Tata Xover
• 2006 Tata Cliffrider
• 2007 Tata Elegante
• 2009 Tata Prima
 C o m m e r c i a l v e h i c l e s
Tat a 161 6 Star b u s
14. Ta t a M a r c o p o l o Bus e s in th e D e l h i B R T .
Tata Star Bus in Nagpur, Maharashtra. Tata Low Floor Buses are also used by
administrations in Delhi, Mumbai, Pune, Udaipur and Indore
• Tata Ace
• Tata TL/ Telcoline /207 DI Pickup Truck
• Tata 407 Ex and Ex2
• Tata 709 Ex
• Tata 809 Ex and Ex2
• Tata 909 Ex and Ex2
• Tata 1109 (Intermediate truck)
• Tata 1510/1512 (Medium bus)
• Tata 1610/1616 (Heavy bus)
• Tata 1613/1615 (Medium truck)
• Tata 2515/2516 (Medium truck)
• Tata Starbus (Medium Bus)
• Tata Globus (Low Floor Bus)
• Tata Marcopolo Bus (Low Floor Bus)
• Tata 3015 (Heavy truck)
• Tata 3118 (Heavy truck) (8X2)
• Tata 3516 (Heavy truck)
• Tata 4923 (Ultra-Heavy truck) (6X4)
• Tata Novus (Heavy truck designed by Tata Daewoo)
 Mili t a r y v e h i c l e s
16. Introduction to the TATANANO
The T a t a N a n o is a proposed city car debuted by India's Tata Motors at the
9th annual Auto Expo on January 10, 2008 at Pragati Maidan in New Delhi, India.
Called thepeople’scar in Tata's promotional material, it was projected to be the least
expensive production car in the world. The standard version of the Nano is projected
to sell for Rs. 100,000 (approximately US $2500, GBP 1277, or € 1700) , not
including fees or delivery. Newsweek identifies the Nano as a part of a "new breed
of 21st-century cars" that embody "a contrarian philosophy of smaller, lighter,
cheaper" and portend a new era in inexpensive personal transportation —
and potentially, "global gridlock". The Wall Street Journal confirms a global trend
toward small cars, led by the Nano.
The prefix "Nano" derives from the Greek root 'nanos', meaning dwarf — as with
nanometer. "Nano" also means "small" in Gujarati, the native language of the Tata
family, founders of the Tata Group.
History and conception
The project to create a 1 lakh (1 lakh = 100000 rupees) car began in 2003, under the Chairman
of Tata Motors, Ratan Tata. The strategy behind the project was the awareness of the number
of Indian families who had two wheeled transport, but couldn't afford a four wheel car, and
was based on the company's success in producing the low cost 4 wheeled Ace truck in May
The Nano was unveiled at the 2008 New Delhi Auto Expo.
Industry convention was that a reliable car couldn't be made at such a low price, so
initial media speculation was that the car would be a simple four-wheeled auto
rickshaw. However, The Times of India reported that the vehicle is "a properly
designed and built car". The Chairman is reported to have said, "It is not a car with
plastic curtains or no roof — it's a real car." During development the company
17. reinvented and minimized the manufacturing process, brought in innovative product
design, and asked component manufacturers to look
at current work and design approaches in a different perspective to produce logical and simple
solutions. The car was designed at Italy's Institute of Development in Automotive Engineering,
with Ratan Tata ordering certain changes during the process, such as reducing the number of
windscreen wipers from two to one.
Fi n a n c i a l pr o j e c t i o n :
Tata initially targeted the vehicle as "the least expensive production car in the world" —
aiming for a starting price of 100,000 rupees or approximately $2300 US despite rapidly
rising material prices. Tata Motors has been able to cut down the cost of the car by
making things smaller and lighter, doing away with superficial parts and changing
material wherever possible. Tata Motors company had received lakhs of enquiries
through the internet for the Nano.
Tata Motors intends to open bookings for the car three months from now. Tata Motors
plans to produce 2,50,000 Tata Nano Cars in the first phase and add 1,00,000 in the
second phase, taking the total production capacity to 3,50,000 cars probably by the end
the next financial year
As of August, 2008 material costs have risen from 13% to 23% over the car’s
development, and Tata now faces the choice of introducing the car with an artificially
low introductory price, raising the price of the car, or foregoing profit on the car — the
latter an unlikely proposition., while an increased price on the Nano will likely decrease
Te c h n i c a l ov e r v i e w :
Desi g n
The People’s Car, designed with a family in mind, has a roomy passenger compartment
with generous leg space and head room. It can comfortably seat four
persons. Four doors with high seating position make ingress and egress
18. easy. Yet with a length of 3.1 metres, width of 1.5 metres and height of 1.6 metres, with
adequate ground clearance, it can effortlessly manoeuvre on busy roads in cities as well
as in rural areas. Its mono-volume design, with wheels at the corners and the powertrain
at the rear, enables it to uniquely combine both space and manoeuvrability, which will
set a new benchmark among small car
Engi n e
Unlike other low cost Indian cars, this one is going to have a variomatic gear system.
Instead of manual gear box in conventional cars it is coming up as gear less or rather
with an automatic gear transmission. This helps to improve the efficiency & mileage by
magnifying the torque output.
As in international markets, the compact car from Tata will have back mounted engine,
pushing the luggage space to the front. Making the engine closer to the fuel tank has
another advantage of increased fuel efficiency. Rear mounted engine also help in
reducing the power loss during transmission. The car will have front disk and rear drum
brakes. The company claims mileage of 22 kmpl in city and 26 kmpl on highway.
Fu e l Effi c i e n c y
19. The People’s Car has a rear-wheel drive, all-aluminium, two-cylinder, 623 cc, 33 PS,
multi point fuel injection petrol engine. This is the first time that a two-cylinder gasoline
engine is being used in a car with single balancer shaft. The lean design strategy has
helped minimise weight, which helps maximise performance per unit of energy
consumed and delivers high fuel efficiency. Performance is controlled by a specially
designed electronic engine management system.
Saf et y & Co m f o r t
By adhering to the fact that less weight requires less power, the 1 lakh car is made of
light weighing steel. This has made the Tatas come up with a cheap alternative with out
compromising on safety and performance. The base model will feature glass windows
that can be cranked up. The tail lights are expected to appear like as in Tata Indica.
Higher versions will have the comforts of power steering, power windows, air-
conditioning and much more. With an all sheet-metal body, it has a strong passenger
compartment, with safety features such as crumple zones, intrusion-resistant doors, seat
belts, strong seats and anchorages, and the rear tailgate glass bonded to the body.
Tubeless tyres further enhance safety. It
exceeds current regulatory requirements with a strong passenger compartment, crumple
zones, intrusion resistant doors, seat belts, strong seats and anchorage
Contr o v e r s i e s In v o l v e d
Controversies also arose about Tata's planned manufacturing unit for the car in Singur,
West Bengal, where the state government of West Bengal has allocated 997
20. acres (4.03km²) to Tata Motors. The construction of the car
factory on that tract of land will require fertile agricultural land and the expropriation
and eviction of ca. 15,000 peasants and agricultural workers. The affected farmers fear
they will receive inadequate or no compensation and therefore lose their livelihoods.
Activists near Kolkata, where Tata's manufacturing unit is located, started burning the
car in effigy. In New Delhi, a group of six women protested wearing T-shirts bearing
slogans that said, "The Rs 1 lakh car has Singur people's blood on it." The Trinamool
Congress alleged that Tata motors usurped the agrarian land for the construction site and
has threatened to stall the manufacture of
the car. The 11 cases were dismissed.
The Nano is alleged to have severely affected the used car market in India, as many
Indians opt to wait for the Nano's release rather than buying used cars, such as the
Maruti 800 (a rebadged Suzuki Alto), which is considered as the Nano's nearest
competitor. Sales of new Maruti 800s have dropped by 20%, and used ones by 30%
following the unveiling of the Nano.
It will be a tragedy if such a mega investment and employee generating project by one
of India’s most respected company is lost to West Bengal on account of a failure of
communication among its stakeholders. It’s time that we as a nation begin to think of
such projects as national projects and not become captive to immediate impulses. There
cannot be and must never be any contradiction between industrialisation and welfare of
In a democracy, the sensitivity of all stakeholders have to be addressed and in the
context of land acquisition controversies, the new law of land acquisition and
rehabilitation, proposed by the UPA government, is the way forward. If the Tata
withdraws from the Nano project in West Bengal, investors’ sentiments will be hurt, and
the only way for the company to move forward is for all concerned to ensure a political
21. atmosphere conducive for investment. The Nano has 34 patents on the car’s design
itself, which is a cause for national celebration as it represents a major technological and
manufacturing feat in the automotive sector. All projects of technological excellence and
originality that give India a special place in innovation and unique competitive
advantage, should be treated as national projects. The state government should ensure
the farmers are justly compensated in terms of price for their land and employee
opportunities in the car project through suitable policy initiative. Democratic
government is all about dialogue and moderation, and we hope that the West Bengal
government will initiate purposive dialogue with all concerned. After all, his unfortunate
controversy must be resolved to the satisfaction of all
stakeholders through dialogue alone.
La t e s t At Si n g u r :
In Tata Motors’ long term interests Singur has become a flash point and a hot bed for
political activity. The average Indian will however be synonymous with Singur as the
chief production facility of the World’s cheapest car. The much talked about 1 lakh
people’s car or the Nano. This statement is the first clear indication by Ratan Tata that
he isn’t interested in dealing with the violent politics of Singur. Ratan Tata is not the
type of man who uses the media to play around which means that today’s statement is a
forecast of what will happen unless things change at ground zero in Singur. For
investors and shareholders of Tata Motors, this is a major development which could go
either way for them and simultaneously their investments. If Tata Motors decide to
move out then almost 2 years worth of work will have to be re-started somewhere else.
Despite Tata’s confidence that they are capable of rolling out the Nano by October,
future production will be hampered if they are forced to shift their project elsewhere.
Singur has become a political issue between the government and the opposition over the
government’s ‘capture’ of Farmer agricultural land. While the opposition alleges that
22. some land has been forcefully acquired, while for some adequate compensation has not
been paid; the
important fact remains that violent methods are being used to deal with the situation.
Farmers protesting the Tata plant have resorted to beating up the staff of the Singur
plant .Serious bodily damage has been inflicted on the staff and family members of Tata
Motors at Singur. This has been the main reason why Tata might very well pull out of
Singur. For the state housing the Nano project, things are serious for West Bengal. The
Nano project at Singur has put in around 1500 crores and will pump in even more once
serious production begins. For a state that is in need of heavy investment, a fiasco like
this will set a dangerous precedent and deter future investments by corporates in India
and the World. Tata Motors if booted out of Singur might make their way to the state of
Uttar Pradesh. Even Uttaranchal and Arunachal Pradesh with their lenient tax structures
could be unlikely gainers. There are also the special economic zones of Gujarat and
Karnataka that hold promise. If Tata decide to move, investors can take heart from the
fact that despite delayed production and eventually sales, the Nano will still find takers.
24. RESEARCH METHODOLOGY
• To know the present Consumer Perception about TATA NANO.
• Finding future potential for NANO.
There are two types of data collection method use in my project work report.
For my project, I decided on primary data collection method for observing consumer
perception for TATA NANO and approaching customers directly in the field, comparing
and references to know their preference. In survey approach .I selected a questionnaire
method for taking a customer view because it is feasible from the point of view of my
subject & survey purpose.
I decided on secondary data collection method was used by referring to various
websites, books, magazines, journals and daily newspapers for collection
information regarding project under study
Sample size :- The sample size is 330
Sampling method:- The consumers are selected by the simple random method
I am a student of Shri Shankracharya institute of management & technology. As
a part of my curriculum I am conducting a study on “consumer perception & future
potential for TATA NANO ” It would be a great help if you please spare some of your
time to fill this questionnaire. The responses would be kept strictly confidential & use to
A) Name -----------------------------------------------------
B) Age --------------------------------------------------------
C) Designation ----------------------------------------------
1. What is the first thing, which comes into your mind when you think
2. Instead of purchasing a Bike, will you prefer to go for the NANO?
3. Can’t say
3. Which feature of NANO attracts you most, that inspires you to go for
4. Interior space
5. All the above
6. Can’t say
6. Do you think NANO is people's car?
3. Can’t say
7. Will you recommend NANO to your friends and relatives?
26. 3. Can’t say
8. Which small car would you prefer to buy?
1. Maruti 800
2. Tata NANO
9. How long can you wait for NANO?
1. 1-2 months
2. 2-4 months
3. 4-6 months
4. Can’t wait
10. If the price of NANO rises, would you still purchase it?
3. Can’t say
11. Will Tata be able to maintain the price of NANO in future if there is hike
cost of raw materials?
3. Can’t say
13. Will there be traffic problem with the introduction of NANO on Indian
3. Can’t say
14. Can you trust NANO for safety?
3. Can’t say