A

STUDY
ON

“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

Submitted by,
Richa Vohra
MBA – Semester II
(Session 2008-2010)
 Shri Shankaracharya
Institute of Management
and Technology
Junwani, Bhilai (C.G.) - 490020

ii | P a g e
CERTIFICATE

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
Pvt. Ltd.

Date: -
Richa Vohra

Mr. Narendra Sahu

M.B.A (2008-2010)
SM. (Sairam Automobiles & services

Pvt. Ltd.)
DECLARATION

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.

Place: Bhilai
Richa Vohra
Date:
MBA – Semester II

[ii]
ACKNOWLEDGEMENT

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
interviewing them.
Finally, I thank all the team members for interacting
and sparing their valuable time with me whenever possible

.
Richa Vohra
M.B.A (2nd year)

[iii]
[iv]
TABLE OF CONTENTS

PAGE NO

Acknowledgement

DECLARATION

CERTIFICATE

TABLE OF CONTENTS

EXECUTIVE SUMMARY

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

[v]
3. RESEARCH METHODOLOGY

4. DATA ANALYSIS AND RESULTS

5. INTERPRETATION OF FINDINGS

6. RECOMMENDATIONS

7. LIMITATIONS

7. CONCLUSION

v. REFERENCES

APPENDICES

[vi]
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

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-

.
.

[viii]
INTRODUCTION TO THE COMPANY

Tata Motors Limited, formerly known as TELCO

(TATA ENGINEERING AND LOCOMOTIVE COMPANY), is a multinational
corporation headquartered in Mumbai, India. It is India's largest
passenger automobile and
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
January 2008.
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]
Pune.

1. History

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.

Various Products of TATA Motors

[1] Passenger cars and utility vehicles

[2]
Tata Indigo SW

• Tata Sierra
• Tata Estate
• Tata Sumo/ Spacio
• Tata Safari
• Tata Indica
• Tata Indigo
• Tata Indigo Marina
• Tata Winger
• Tata Nano (3RD March 2009)
• Tata Xenon XT
• Tata Xover (2009)

[2] Concept vehicles

Tata Cliffrider
• 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

[3] Commercial vehicles

[3]
Tata 1616 Starbus

Tata Marcopolo Buses in the Delhi BRT .

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)

[4]
• Tata Novus (Heavy truck designed by Tata Daewoo)

[4] Military vehicles

• Tata LSV (Light Specialist Vehicle)

• Tata 2 Stretcher Ambulance
• Tata 407 Troop Carrier, available in hard top, soft top, 4x4, and 4x2
versions
• Tata LPTA 713 TC (4x4)
• Tata LPT 709 E
• Tata SD 1015 TC (4x4)
• Tata LPTA 1615 TC (4x4)
• Tata LPTA 1621 TC (6x6)
• Tata LPTA 1615 T

[5]
Introduction to the TATANANO

The Tata Nano 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 the people’s car 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 2005.
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

[6]
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 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.

Financial projection:

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 demand

[7]
Technical overview:

Design

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
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

Engine

[8]
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.

Fuel Efficiency

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.

Safety & Comfort

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,

[9]
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

Controversies Involved
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

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

[10]
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 farmers.
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 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

[11]
all, his unfortunate controversy must be resolved to the satisfaction of
all
stakeholders through dialogue alone.

Latest At Singur:

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 some land has been forcefully acquired, while
for some adequate compensation has not been paid; the

[12]
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.

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[14]
RESEARCH METHODOLOGY

Objectives

• To know the present Consumer Perception about TATA NANO.

• Finding future potential for NANO.

Data collection

There are two types of data collection method use in my project work report.

-Primary data

-Secondary data.

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

[15]
qestionnaire
Dear respondents,
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
data analysis

A) Name -----------------------------------------------------

B) Age --------------------------------------------------------

C) Designation ----------------------------------------------

1. What is the first thing, which comes into your mind when you think
about NANO?

a. cheap
b. economical
c. affordable
d. compact

2. Instead of purchasing a Bike, will you prefer to go for the NANO?

1. Yes
2. No
3. Can’t say

3. Which feature of NANO attracts you most, that inspires you to go for
NANO?

1. Price
2. Design
3. Mileage
4. Interior space
5. All the above
6. Can’t say

6. Do you think NANO is people's car?

1. Yes
2. No
3. Can’t say

7. Will you recommend NANO to your friends and relatives?

1. Yes
2. No
3. Can’t say

[16]
8. Which small car would you prefer to buy?

1. Maruti 800
2. Tata NANO
3. Other……………….
.
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?

1. Yes
2. No
3. Can’t say

11. Will Tata be able to maintain the price of NANO in future if there is hike
in
cost of raw materials?

1. Yes
2. No
3. Can’t say

13. Will there be traffic problem with the introduction of NANO on Indian
roads?
1. Yes
2. No
3. Can’t say

14. Can you trust NANO for safety?

1. Yes
2. No
3. Can’t say

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