- Photo: Sandeep Rathod. The original uploader was Nikkul at English Wikipedia. [CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0)]

The Tata Nano - when the people reject a people's car

How did this happen? Why did this happen? I'll try to answer these questions.

1y ago

Picture the scene. It's 2008. The world is on the verge of a financial collapse. Fidel Castro has stepped down as the President of Cuba due to his failing health. The Large Hadron Collider has been powered on for the first time and is about to make huge leaps in the world of particle physics. Barack Obama has become the first African-American president of the United States. It's a pretty big year. Big enough, perhaps, to launch something that should change the car market forever? Well, Tata thought so, because this was the year they unveiled the Nano to the world.

Tata were feeling pretty confident with the Nano. They'd launched the Tata Ace mini truck in 2005 to create a rival to the three wheeled mini trucks made by companies like Piaggio and Mahindra, amongst others. Priced at 225,000 - 335,000 Rupees (around £2400 - £3600, or around $3150 - $4800), it was a cheap way of converting 3 wheeled truck users onto a four wheeled platform. Clearly the Ace was a pretty successful idea, as of 2019 the truck is still in production! With the small truck segment cornered by Tata, they decided to apply that logic of converting people to four wheeled transport at low cost into the car world.

"...if Tata were going to compete with people who would otherwise ride motorbikes, they needed to make the Nano cheap."

You see, the Nano wasn't designed for car owners. Not really, anyway. The Nano was designed for people who would otherwise take their family around on a motorbike. Motorbikes, as any of you who either ride them or who people who ride them will know, tend to be a fair bit cheaper to purchase than cars, at least in general. Therefore, if Tata were going to compete with people who would otherwise ride motorbikes, they needed to make the Nano cheap. Really cheap. As cheap as they possibly could, whilst it could still have all the things it needed to be a proper car. The result was that Tata did some really serious cost cutting.

What kind of cost cutting, you ask? Well, the kind of cost cutting that even the stingiest of your miserly relatives would recoil in horror at. The kind of cost cutting that even people from the broken biscuits and the middle isle of Lidl brigade wouldn't even touch. "Is it really that crazy?" I hear you ask. Yes. Yes it is. Let me go into more detail:

The Nano's body was made of very thin, flimsy steel because it was cheap to manufacture. The earliest versions didn't even have an opening rear window let alone a full hatchback, meaning that if you wanted to put any luggage in the boot area you would need to fold the rear seats down (Tata did eventually give the Nano a proper full hatch in 2015). The car was designed to only have one windscreen wiper instead of two. Each wheel only had 3 lug nuts instead of 4, just because saving 4 lug nuts in the construction of the car helped save a noticeable amount of money. The car initially only had a wing mirror on the drivers' side (a passenger side mirror was added to higher spec models from 2012). Base models also had no power steering, no power windows, no radio or CD player, no air conditioning and no heater. The Nano never came with any airbags either.

The Tata Nano's interior is pretty much as basic as you can get. Photo: Clayton Tang [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)]

The Tata Nano's interior is pretty much as basic as you can get. Photo: Clayton Tang [CC BY-SA 3.0 (https://creativecommons.org/licenses/by-sa/3.0)]

One of the most hilarious examples of cost cutting on the Nano, however, was to do with how you put fuel into the car. Tata deemed a fuel filler cap to be too expensive for the ultra cheap Nano, so refuelling the car was an altogether different beast. The bonnet of the car had to be opened to reveal the fuel inlet inside - something that might be more familiar to Trabant owners than those expecting a modern car from the late 00s!

To round off the Nano's miserly specification, the car was fitted with a 624cc 2 cylinder engine, mounted in the rear of the car. If you were thinking that this sounds like a motorbike engine... you'd probably be right. It's not really that different from a motorbike engine at all. That makes sense though, considering who this car was intended at - people who would otherwise be transporting their families around on the back of a motorbike.

So what was the total result of all this cost cutting? A car that Tata could bring to market in India at the ludicrously bargain price of 100,000 Rupees. That's equivalent to around $2000 at the time. This made it the cheapest new car on sale anywhere in the world. It makes the price of the base model of James May's favourite cheap car the Dacia Sandero seem opulent and extravagant. But this is the most important part of the car. It's cheap enough to, at least financially, sway people away from their motorbikes and into the world of car ownership. It's not competing against other cars, at least not really.

So, the Tata Nano was unleashed upon the world in all its cheapness and initially things seemed positive. It seemed like the strategy of converting motorbike owners into car owners might work as well as Tata's previous attempt at converting 3 wheeled light truck owners into 4 wheeled light truck owners with the Ace. People even hailed the Nano as a people's car. A car that would finally get India on four wheels en masse. But, as well all well know by this point, that was not to be the case.

So why did Tata's strategy work with the Ace but fail with the Nano? Well, commercial vehicles and cars for personal use are very different beasts. Very different things are expected of them. A commercial vehicle like the Tata Ace is expected to carry all sorts of smaller goods within the bustling environment of a city as reliably as possible. Comfort, safety and frills are not a priority. It just needs to be cheap, simple and easy to maintain. The Ace absolutely nailed that and that's why it's still in production today.

There's also the matter that in countries that are rapidly developing and growing into global economic players such as India and China, owning a car is considered to be symbol of social and economic progression. If you couldn't afford to have a car previously and now you're able to buy one, that's a signpost that you've climbed a rung up on the social ladder. When this is taken into account, the Nano is a double edged sword. Consider a point from Aging Wheels, a YouTuber who has recently done a video on the Nano. He made a comment that if you could only afford the cheapest car on sale, doesn't that send a signal that you're poor?

The fact that Tata completely overlooked the viewpoint of a car being a symbol of social status was an enormous marketing failure, something which Ratan Tata himself even admitted. In a market where a car is a luxury rather than a necessity, the word "cheap" has so much more negative connotations than in North America or Europe, where a car is viewed as more of a commodity. This was an enourmous marketing failure that Tata poured insane amounts of money into trying to correct too. They tried to export the car to various different markets including Indonesia and Africa - something which gloriously failed, as expected.

"Making the world's cheapest new car is a formidable achievement, no matter what way you look at it."

The cheapness of the Nano also opens up a big moral quandry. Making the world's cheapest new car is a formidable achievement, no matter what way you look at it. But is it the right thing to do from a moral and ethical standpoint? It could be argued that selling a car with so much cost cutting to the point where it's dangerously unsafe (it got a zero star crash test rating when it was put through crash testing programmes) is abhorrent. You're allowing people to buy a product that they could be killed by, all for the purpose of making a bit of extra money out of people who would otherwise be too poor to afford a car.

I know I've gone a little bit into ethical capitalism levels of political theory here. I know that's something that not everyone who reads this article is going to agree with. Maybe, in a way, it's very privileged of me to force this idea upon a product that was supposed to mark an important transition in the personal mobility of a rapidly growing and expanding world power. The thought still lingers in my mind, however. What if it's actually massively counter productive to obsess over building so-called people's cars, at least those that are so basic and cheaply made that they actually pose a safety risk to their drivers?

This, in effect, is why I think the Nano failed. The safety issues, bargain basement levels of standard equipment and extreme cost cutting are not what killed the Nano, although they doubtless helped to turn it into some kind of a passing curiosity that could never get any sales out of its home markets. The inability of Tata to recognise that what worked in the commercial vehicle sector wouldn't necessarily translate into personal cars didn't really kill the Nano either, even though it certainly helped due to the abysmal sales.

What killed the Nano was that, even though it was supposed to be almost a kind of societal progression on India's roads, it still screamed to everyone else who was driving around you that you were poor. Sure, you could afford a car, but the only car you could afford was the cheapest one. It was a total marketing failure and one that Tata could never recover the Nano from. That's why, these days, the Tata Nano is merely a footprint in the story of the people's car and will eventually become only a curiosity that you might see in a museum.

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Comments (19)

  • To everyone who cringes about the safety of this "car", don't forget that this car was made for the people who ride bikes with 3-4 people on. So it's actually much more safer than a bike as you would at least not fall down with your family during slippery conditions.

    Good article nonetheless 👍

      1 year ago
    • Yeah, I did make it pretty clear in the article that this was a car that was supposed to get people off motorbikes. Still though, the car's safety levels are pretty shocking.

        1 year ago
    • Meh I still think it's a better option than bikes for a not-so-wealthy family man.

        1 year ago
  • in india it isnt uncommon to have dangerously unsafe cars with zero star ratings. most manufacturers in the economy segment have bare minimum number of airbags to meet regulations with unsafe everything else. when nano was released none of those economy cars(like the maruti-suzuki swift alto, hyundai i10 and such other small cars) had basic safety equipment either as the govt didnt care back then not that it does now, so it was understandable and accepted that nano’s unsafeness isnt ethically wrong. but then its a completely different market. infact india’s first domestic car to get a 5-star rating was infact tata’s very own nexon

      1 year ago
    • First car is the nexon? Isn't that like a 2018 car or suv or hatchback?

        1 year ago
    • yeah its been around for around 2 years now. what i meant was first 5-star rated locally produced indian car. the indian domestic market suzuki swift has a 2 star rating, same with the new hyundai santro and many others. safety is just not the...

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        1 year ago
  • What killed the Nano was hype.

    Launch it silently as just another cheap option on the market, and you could even charge a bit more and it would catch on.

    Hype it and you have the arguments here exposed.

      1 year ago
  • Think of it the other way: as bad as the crash test result for the Nano was, think about how the passengers would have fared had they been 2-up (or more) on a single-cylinder motorbike 😮

      1 year ago
  • I agree on the social element of Nano failure. In developing countries, these cars wont work. If u make it to buy a car, u dont want Nano.

    Maybr if they double the price, up to 4.000 but made it better and safer, and offered it in developed market as cheap alternative, it would have succeded?

    Isnt G-wizz the example? Or Dacia cars all over Europe?

    I dare to say, even Yugo sold 6 figures in USA in the 80s. Way better than in Eastern Europe at the time.

      1 year ago