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The World's Cheapest Car is Now Dead

The tagline that got it name and fame ultimately became the reason for its untimely death

By Kavi KamatPublished 3 years ago 4 min read
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Image by Alexander Gounder from Pixabay

Ever wondered which is the world's cheapest car? If you have no idea, then here it is - the TATA Nano. It launched in 2009 in India, at a price tag of Rs. 100K (Re. 1 = $65 in 2009), which is equivalent to $1500 at the time of launch, was probably the cheapest car on the planet.

Tata Group, the manufacturer of Tata Nano, is one of India's biggest industrial houses and the owner of Jaguar and Land Rover.

Ratan Tata, the Ex-Chairman & CEO of Tata Group, conceived the idea of the world's cheapest car after he saw a family of four riding on a bike on a rainy day.

I an interview given in Mar2011 Tata said, "The fact of unsafe travel was bothering me. What really motivated me was constantly seeing Indian families riding on scooters, four or five on a scooter, maybe the child sandwiched between the mother and father on slippery roads in the dark."

In 2003, Ratan Tata set out on his quest for the affordable car—later christened the Nano—using the resources of the group's car company, Tata Motors. Tata targeted the Nana towards the lower-income groups who could not afford a car and were bike users.

The market segment was untapped and had massive potential in India, where cars were a luxury and had a considerable population in this mid-income segment. Nano was about to rewrite the history of the automobile sector in India.

As the word was out and Nano started to gather fame, it was also about to become one of the most controversial car launches in Indian history.

A car brings down a 34-year-old state government.

Tata Motors planned to invest up to Rs. 2,000 crore to set up a Nano manufacturing plant as it expected huge demand. After speaking to the state government, Tata Motors decided to set up a sprawling factory in Singur, West Bengal, in 2006. Singur was 50 km away from the state capital- Kolkatta. And Tata planned to turn it into an auto hub.

Tata was probably not aware that this decision would haunt it in the future and lead to a downfall of a solid 34-year-old long-standing government.

To set up its sprawling factory, the then Communist Party of India-Marxist (CPIM) government of West Bengal sought to take over 997 acres of fertile farmland, sparking a severe backlash from farmers, environmentalist and opposition parties.

Widespread protests broke out across the state, leading to the ouster of the communists after over three decades in power. The state got its first woman chief minister in Mamata Banerjee, who had spearheaded the farmer's protests. This meant trouble for Tatas.

Given the political turbulence and negative publicity in West Bengal, the Tatas, in October 2008, shifted the Nano factory's plans to Sanand in Gujarat. Tata's brand's trust was apparent when Narendra Modi, the then chief minister of Gujarat and India's current prime minister, reportedly approved the project over just an SMS.

The launch

Finally, in 2009, the car was launched in two variants: a basic model priced at Rs 1,12,735 and the luxury version costing Rs 1,70,335.

The launch of one of the world's cheapest cars sparked unprecedented euphoria in India and significant excitement across the globe.

In 2010, Tata sold around 9,000 units of the Nano, with customers on a waiting list. Since then, however, things went downhill.

Death of the cheapest car within a decade

By 2011, Tata Motors sold a mere 500 units of the Nano. This drop in sales was attributed to multiple reasons, the foremost being safety. In 2010, a new Nano caught fire on a Mumbai road, and such reports continued over the next few months.

However, the biggest reason for the down-trending sales was the same marketing tagline that had got them fame - "The World's Cheapest Car."

As mentioned earlier, Indians considered cars as luxury goods. There was a pride in possessing a car. So as the initial excitement settled, the association of the word "Cheapest" challenged the perception and was not taken well.

Moreover, the stigma of buying the "cheapest car" proved to be its undoing.

Ratan Tata later admitted, "It became termed as a cheapest car by the public and, I am sorry to say, by ourselves, not by me, but the company when it was marketing it. I think that is unfortunate."

Over the next few years, the sales kept falling. Come June 2018, Nano sold only three units, and just one produced.

Now, after a nine-year run, the Nano was ready to drive into the sunset, with the Tatas announcing that the car will subsequently be produced only on demand.

The curtains may have finally come down on a grand experiment in the Indian automobile sector. An idea born on a rainy day seems to have broken down irreparably by the rains in 2018.

industry
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About the Creator

Kavi Kamat

A banker by profession and a writer by passion. My life has always been full of ups & down, a treasure which helps me to pen down my memories. Technology and self-help are my drivers and reading is my hobby.

Thanks for your time.

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