Project On Small Car Marketing-Nano

Small Car Marketing-Nano
CHAPTER 1:
MARKETING
INTRODUCTION:-
Marketing. Several definitions have been proposed for the term marketing.
Each tends to emphasize different issues. Memorizing a definition is unlikely to
be useful; ultimately, it makes more sense to thinking of ways to benefit from
creating customer value in the most effective way, subject to ethical and other
constraints that one may have. The 2006 and 2007 definitions offered by the
American Marketing Association are relatively similar, with the 2007 appearing
a bit more concise. Note that the definitions make several points:
A main objective of marketing is to create customer value.
Marketing usually involves an exchange between buyers and sellers or between

other parties.
Marketing has an impact on the firm, its suppliers, its customers, and others
affected by the firm’s choices.
Marketing frequently involves enduring relationships between buyers, sellers,

and other parties.
Processes involved include “creating, communicating, delivering, and

exchanging offerings.Delivering customer value. The central idea behind
marketing is the idea that a firm or other entity will create something of value to
one or more customers who, in turn, are willing to pay enough (or contribute
other forms of value) to make the venture worthwhile considering opportunity
costs. Value can be created in a number of different ways. Some firms
manufacture basic products (e.g., bricks) but provide relatively little value
above that. Other firms make products whose tangible value is supplemented by
services (e.g., a computer manufacturer provides a computer loaded with
software and provides a warranty, technical support, and software updates). It is
not necessary for a firm to physically handle a product to add value—e.g.,
online airline reservation systems add value by (1) compiling information about
available flight connections and fares, (2) allowing the customer to buy a ticket,
(3) forwarding billing information to the airline, and (4) forwarding reservation
information to the customer.
It should be noted that value must be examined from the point of view of the
customer. Some customer segments value certain product attributes more than
1
others. A very expensive product—relative to others in the category—may, in
fact, represent great value to a particular customer segment because the benefits
received are seen as even greater than the sacrifice made (usually in terms of
money). Some segments have very unique and specific desires, and may value
what—to some individuals—may seem a “lower quality” item—very highly.
Some forms of customer value. The marketing process involves ways that
value can be created for the customer. Form utility involves the idea that the
product is made available to the consumer in some form that is more useful than
any commodities that are used to create it. A customer buys a chair, for
example, rather than the wood and other components used to create the chair.
Thus, the customer benefits from the specialization that allows the manufacturer
to more efficiently create a chair than the customer could do himself or herself.
Place utility refers to the idea that a product made available to the customer at a
preferred location is worth more than one at the place of manufacture. It is
much more convenient for the customer to be able to buy food items in a
supermarket in his or her neighborhood than it is to pick up these from the
farmer. Time utility involves the idea of having the product made available
when needed by the customer. The customer may buy a turkey a few days
before Thanksgiving without having to plan to have it available. Intermediaries
take care of the logistics to have the turkeys—which are easily perishable and
bulky to store in a freezer—available when customers demand them.
Possession utility involves the idea that the consumer can go to one store and
obtain a large assortment of goods from different manufacturers during one
shopping occasion. Supermarkets combine food and other household items from
a number of different suppliers in one place. Certain “superstores” such as the
European hypermarkets and the Wal-Mart “super centers” combine even more
items into one setting.
2
Consumer Behaviour:-
Consumer behaviour involves the psychological processes that consumers go
through in recognizing needs, finding ways to solve these needs, making
purchase decisions (e.g., whether or not to purchase a product and, if so, which
brand and where), interpret information, make plans, and implement these plans
(e.g., by engaging in comparison shopping or actually purchasing a product).
Sources of influence on the consumer. The consumer faces numerous

sources of influence.
Often, we take cultural influences for granted, but they are significant. An
American will usually not bargain with a store owner. This, however, is a
common practice in much of the World. Physical factors also influence our
behavior. We are more likely to buy a soft drink when we are thirsty, for
example, and food manufacturers have found that it is more effective to
advertise their products on the radio in the late afternoon when people are
getting hungry. A person’s self-image will also tend to influence what he or she
will buy—an upwardly mobile manager may buy a flashy car to project an
image of success. Social factors also influence what the consumers buy—often,
consumers seek to imitate others whom they admire, and may buy the same
brands. The social environment can include both the mainstream culture (e.g.,
Americans are more likely to have corn flakes or ham and eggs for breakfast
than to have rice, which is preferred in many Asian countries) and a subculture
(e.g., rap music often appeals to a segment within the population that seeks to
distinguish itself from the mainstream population). Thus, sneaker
manufacturers are eager to have their products worn by admired athletes.
Finally, consumer behavior is influenced by learning—you try a hamburger and
3
learn that it satisfies your hunger and tastes good, and the next time you are
hungry, you may consider another hamburger.
Consumer Choice and Decision Making: Problem Recognition. One model

of consumer decision making involves several steps. The first one is problem
recognition—you realize that something is not as it should be. Perhaps, for
example, your car is getting more difficult to start and is not accelerating well.
The second step is information search—what are some alternative ways of
solving the problem? You might buy a new car, buy a used car, take your car in
for repair, ride the bus, ride a taxi, or ride a skateboard to work. The third step
involves evaluation of alternatives. A skateboard is inexpensive, but may be
ill-suited for long distances and for rainy days. Finally, we have the purchase
stage, and sometimes a post-purchase stage (e.g., you return a product to the
store because you did not find it satisfactory). In reality, people may go back
and forth between the stages. For example, a person may resume alternative
identification during while evaluating already known alternatives.
Consumer involvement will tend to vary dramatically depending on the type of

product. In general, consumer involvement will be higher for products that are
very expensive (e.g., a home, a car) or are highly significant in the consumer’s
life in some other way (e.g., a word processing program or acne medication).
It is important to consider the consumer’s motivation for buying products. To

achieve this goal, we can use the Means-End chain, wherein we consider a
logical progression of consequences of product use that eventually lead to
desired end benefit. Thus, for example, a consumer may see that a car has a
large engine, leading to fast acceleration, leading to a feeling of performance,
leading to a feeling of power, which ultimately improves the consumer’s self-
esteem. A handgun may aim bullets with precision, which enables the user to
kill an intruder, which means that the intruder will not be able to harm the
consumer’s family, which achieves the desired end-state of security. In
advertising, it is important to portray the desired end-states. Focusing on the
large motor will do less good than portraying a successful person driving the
car.
4
Consumer Research Methods:
Market research is often needed to ensure that we produce what customers

really want and not what we think they want.
Primary vs. secondary research methods. There are two main

approaches to marketing. Secondary research involves using information that
others have already put together. For example, if you are thinking about
starting a business making clothes for tall people, you don’t need to question
people about how tall they are to find out how many tall people exist—that
information has already been published by the U.S. Government. Primary
research, in contrast, is research that you design and conduct yourself. For
example, you may need to find out whether consumers would prefer that your
soft drinks be sweater or tarter.
Research will often help us reduce risks associated with a new product, but it
cannot take the risk away entirely. It is also important to ascertain whether the
research has been complete. For example, Coca Cola did a great deal of
research prior to releasing the New Coke, and consumers seemed to prefer the
taste. However, consumers were not prepared to have this drink replace
traditional Coke.
5
THE 5”Ms OF MARKETING
The five Ms of advertising provide a framework by which you can create an
advertising platform. First, the firm must decide what the purpose of the
advertisements will be. This is called the mission. Monetary constraints
usually determine how large any project can be. This is the money aspect of
the advertising project. Message is the creative aspect of the advertising
strategy. Next, the media by which the message will be delivered must be
determined. Finally, measuring the project is important to determine how
effective the advertisements actually were. This can sometimes be the most
difficult part of the plan, since measuring changes in customer opinion can
be time consuming and costly. In this article, we take a deeper look at the
five Ms of marketing. **Mission** There are several ways that a company
can determine what the mission of an advertising strategy should be.
Quantitative measures such as increasing the awareness of the brand among
a certain segment by a certain percentage can be chosen. For example,
increasing the awareness among financial executives of a certain audit
control offered by your company by 20% could be a mission. This could be
measured before and after using a survey or some other form of primary
research. **Money** Budget constraints are everywhere in business, and
nowhere are they more evident than in small businesses. Advertising and
marketing can sometimes be ignored because they do not offer immediate
results. However, in every business environment, some resources must be
allocated to building a brand and image. Without this, the company will not
continue to grow. Even during recessions, marketing must be a priority to
avoid losing market share. Having a suitable budget is an important part of
the process. **Message** Advertising is a creative process. There are
slogans, themes and gimmicks that try to lure the customer in. The message
of an advertisement is this creative aspect. Any manner of theme can be
implemented as long as it is in line with what the company stands for.
**Media** This aspect of the program refers to the media that will be used
to communicate the message. This can include television, radio, mail,
telephone and in person contact. Most media has metrics to measure their
efficiency and costs associated with those metrics. Choosing the right media
can make or break an advertising program. **Measurement** Finally, the
firm must measure the effects of the program on their intended audience.
This can be done by measuring sales or trying to gauge interest through
research. It is often very difficult to measure how much the advertisements
actually impacted customer interest and how much other external factors
played a part.
6
MODES OF MARKETING
1)Internet marketing:
Internet marketing is the most cost effective and efficient method marketing
during a down economy. Why? Internet marketing allows you to make
adjustments within minutes when a marketing campaign is not working. It
allows you to reach out to consumers within minutes and specific target your
marketing in a way that no other marketing vehicle does.
2) Social Media Marketing:
Social media marketing is marketing using online communities, social
networks, blog marketing and more. It's the latest "buzz" in marketing and often
can seem confusing to those exploring options using social media outlets. Learn
where to start when it comes to social media marketing and where you can get
started. Gain insight into social media platforms such as Twitter, LinkedIn,
Facebook and more.
3) Advertising:
Advertising is a process used for promoting a product or business or it can
defined as a paid form of communicating a message by the use of various
media. Advertising helps people to make aware of a brands
launching.Advertising can be used for comparing a particular brand and its
benefits with its competitors
4) Public Relation:
By the integration of the above elements viz. public and relation we get public
relation. It is a profession that is a part and parcel of management function.
According to Edward L. Bernays, “public relation is the attempt by information,

persuasion, and adjustment to engineer public support for an activity, cause,
movement, or institution.
5)Word of Mouth Marketing:-

Word of mouth is still one of the most powerful forms of advertising on the
planet. The best word of mouth comes from satisfied customers. Go the extra
mile for them, and really work towards building relationships with your
customers. This will result not only in more leads but they'll keep coming back
7
to you in the future. Try running special promotions or coupons for these
regular customers to help them feel that they are special and you'll really be able
to continue to build on these relationships in the future.
The best marketing strategies take advantage of all the different types of
advertising. By spreading your ad dollars around you can be assured of greater
success and better interaction with the public. Start small by combining a
special promotion that will run both in print and online avenues at the same
time. You can keep track of the success of each method by using coupon codes
to see which form suits your company the best
6) Newspaper marketing:
Newspaper circulation has been in decline for the past two decades, and signs
for the future are not looking good. In order to increase newspaper circulation,
more emphasis should be placed on marketing. Newspaper marketing jobs
might be the only newspaper jobs available! Still, other newspapers outsource
their marketing to a newspaper marketing agency. Either way, newspapers
need to make big changes.
7) Radio Marketing:
In a day and age where most people seem to have their computers on at work
and their televisions on at work, and radio is dominated by syndicated talk
shows, can radio play a constructive part in a marketing campaign?
Yes. There are a few ways in which radio can dramatically help a marketing
campaign.
In my view, the most important aspect of radio marketing is no longer

advertisement-oriented. Instead, it can be used to develop credentials as a
celebrity or an expert. Most of the stations interview people from time to time,
and if your product has a local focus, being heard on the radio is likely to give
you instant credibility among the listeners. They will call you immediately if
they need help in your area of expertise, and I have found that this immediate
effect will last longer than you might expect-several weeks perhaps, even for a
single interview.
There is also a cumulative effect from more than one interview. After hearing
you a few times, your potential customers will feel like they know you and
consider you almost a friend. They will remember you if they need your
services, and they will be far more receptive to a direct mail campaign.
8
Even if your market is not predominantly local, the celebrity effect can be
extremely helpful. You can refer to your interviews, and since much radio
programming these days is accessible by internet, your customers can actually
look you up and listen via the web. And you can link to the interviews on your
website. Because of the web connection, the interviews are sometimes
searchable and increase your "presence" in the search engines. And radio
interviews have that "spontaneous" feeling (although they are rarely actually
spontaneous) that lends itself to viral marketing. The same familiarity and
spontaneity, although to a lesser extent, can be achieved with radio advertising.
Of course, the trick to using radio as a significant part of a marketing campaign

is to get interviewed, or to get enough radio commercial exposure at an
affordable price, preferably free
Marketing Tools for Marketing Planning

Marketing is often misunderstood. Everyone defines it differently, and there are
so many moving parts--it’s nearly impossible to know every solution or
possibility. How do you know what types of campaigns to run? What media
will be most effective? How do you use marketing to enhance your business
strategy?
And after you get the answers, how do you turn them into results?
Growth Panel helps you define your strategy by delivering the marketing
planning infrastructure with marketing tools for execution. Instead of focusing
on the latest marketing trends, Growth Panel delivers an unbiased view of
almost every type of business marketing activity. In marketing, there’s no “one-
size-fits-all.” What works for one doesn’t always work for another. Growth
Panel's marketing tools follow the Marketing M.O. marketing process to deliver
a comprehensive solution for easy marketing management.
9
Segmentation, Targeting, and Positioning
Segmentation,targeting, and positioning together comprise a three stage
process. We first (1) determine which kinds of customers exist, then (2) select
which ones we are best off trying to serve and, finally, (3) implement our
segmentation by optimizing our products/services for that segment and
communicating that we have made the choice to distinguish ourselves that way.
Segmentation involves finding out what kinds of consumers with different

needs exist. In the auto market, for example, some consumers demand speed
and performance, while others are much more concerned about roominess and
safety. In general, it holds true that “You can’t be all things to all people,” and
experience has demonstrated that firms that specialize in meeting the needs of
one group of consumers over another tend to be more profitable.
Generically, there are three approaches to marketing. In the undifferentiated

strategy, all consumers are treated as the same, with firms not making any
specific efforts to satisfy particular groups. This may work when the product is
a standard one where one competitor really can’t offer much that another one
can’t. Usually, this is the case only for commodities. In the concentrated
strategy, one firm chooses to focus on one of several segments that exist while
leaving other segments to competitors. For example, Southwest Airlines
focuses on price sensitive consumers who will forego meals and assigned
seating for low prices. In contrast, most airlines follow the differentiated
strategy: They offer high priced tickets to those who are inflexible in that they
cannot tell in advance when they need to fly and find it impractical to stay over
a Saturday. These travelers—usually business travelers—pay high fares but can
only fill the planes up partially. The same airlines then sell some of the
remaining seats to more price sensitive customers who can buy two weeks in
advance and stay over.
10
Note that segmentation calls for some tough choices. There may be a large
number of variables that can be used to differentiate consumers of a given
product category; yet, in practice, it becomes impossibly cumbersome to work
with more than a few at a time. Thus, we need to determine which variables
will be most useful in distinguishing different groups of consumers. We might
thus decide, for example, that the variables that are most relevant in separating
different kinds of soft drink consumers are (1) preference for taste vs. low
calories, (2) preference for Cola vs. non-cola taste, (3) price sensitivity—
willingness to pay for brand names; and (4) heavy vs. light consumers. We now
put these variables together to arrive at various combinations.
Several different kinds of variables can be used for segmentation.
In the next step, we decide to target one or more segments. Our choice should
generally depend on several factors. First, how well are existing segments
served by other manufacturers? It will be more difficult to appeal to a segment
that is already well served than to one whose needs are not currently being
served well. Secondly, how large is the segment, and how can we expect it to
grow? (Note that a downside to a large, rapidly growing segment is that it tends
to attract competition). Thirdly, do we have strengths as a company that will
help us appeal particularly to one group of consumers? Firms may already have
an established reputation. While McDonald’s has a great reputation for fast,
consistent quality, family friendly food, it would be difficult to convince
consumers that McDonald’s now offers gourmet food. Thus, McD’s would
probably be better off targeting families in search of consistent quality food in
nice, clean restaurants.
Positioning involves implementing our targeting. For example, Apple

Computer has chosen to position itself as a maker of user-friendly computers.
Thus, Apple has done a lot through its advertising to promote itself, through its
unintimidating icons, as a computer for “non-geeks.” The Visual C software
programming language, in contrast, is aimed a “techies.”
11
Michael Treacy and Fred Wiersema suggested in their 1993 book The
Discipline of Market Leaders that most successful firms fall into one of three
categories:
Treacy and Wiersema suggest that in addition to excelling on one of the three
value dimensions, firms must meet acceptable levels on the other two. Wal-
Mart, for example, does maintain some level of customer service. Nordstrom’s
and Intel both must meet some standards of cost effectiveness. The emphasis,
beyond meeting the minimum required level in the two other dimensions, is on
the dimension of strength.
Repositioning involves an attempt to change consumer perceptions of a brand,
usually because the existing position that the brand holds has become less
attractive. Sears, for example, attempted to reposition itself from a place that
offered great sales but unattractive prices the rest of the time to a store that
consistently offered “everyday low prices.” Repositioning in practice is very
difficult to accomplish. A great deal of money is often needed for advertising
and other promotional efforts, and in many cases, the repositioning fails.
To effectively attempt repositioning, it is important to understand how one’s

brand and those of competitors are perceived. One approach to identifying
consumer product perceptions is multidimensional scaling. Here, we identify
how products are perceived on two or more “dimensions,” allowing us to plot
brands against each other. It may then be possible to attempt to “move” one’s
brand in a more desirable direction by selectively promoting certain points.
There are two main approaches to multi-dimensional scaling. In the a priori
approach, market researchers identify dimensions of interest and then ask
consumers about their perceptions on each dimension for each brand. This is
useful when (1) the market researcher knows which dimensions are of interest
and (2) the customer’s perception on each dimension is relatively clear (as
12
opposed to being “made up” on the spot to be able to give the researcher a
desired answer). In the similarity rating approach, respondents are not asked
about their perceptions of brands on any specific dimensions. Instead, subjects
are asked to rate the extent of similarity of different pairs of products (e.g., How
similar, on a scale of 1-7, is Snicker’s to Kitkat, and how similar is Toblerone to
Three Musketeers?) Using a computer algorithms, the computer then identifies
positions of each brand on a map of a given number of dimensions. The
computer does not reveal what each dimension means—that must be left to
human interpretation based on what the variations in each dimension appears to
reveal. This second method is more useful when no specific product
dimensions have been identified as being of particular interest or when it is not
clear what the variables of difference are for the product category.
MARKET RESEACH
Cross-Cultural Market Research
Primary vs. secondary research. There are two kinds of market

research: Primary research refers to the research that a firm conducts for its
own needs (e.g., focus groups, surveys, interviews, or observation) while
secondary research involves finding information compiled by someone else. In
general, secondary research is less expensive and is faster to conduct, but it may
not answer the specific questions the firm seeks to have answered (e.g., how do
consumers perceive our product?), and its reliability may be in question.
Secondary sources. A number of secondary sources of country information

are available. One of the most convenient sources is an almanac, containing a
great deal of country information. Almanacs can typically be bought for $10.00
or less. The U.S. government also publishes a guide to each country, and the
handbook International Business Information: How to Find It, How to Use It
(HF 54.5.P33 [1998] in the Reference Department of the Gelman Library),
provides leads on numerous sources by topic. Stat-USA, a database compiled
by the U.S. Department of Commerce and available through the Gelman
Library (you can access it through the “Links” section of my web-site), contains
a great deal of statistical information online. Excellent full text searchable
indices to periodicals include Lexis-Nexis and RDS Business and Industry, also
available through Gelman.
13
CHAPTER 2
Automobile Industry
Automobile Industry History:-
In the year 1769, a French engineer by the name of Nicolas J. Cugnot invented
the first automobile to run on roads. This automobile, in fact, was a self-
powered, three-wheeled, military tractor that made the use of a steam engine.
The range of the automobile, however, was very brief and at the most, it could
only run at a stretch for fifteen minutes. In addition, these automobiles were not
fit for the roads as the steam engines made them very heavy and large, and
required ample starting time. Oliver Evans was the first to design a steam
engine driven automobile in the U.S.
A Scotsman, Robert Anderson, was the first to invent an electric carriage

between 1832 and 1839. However, Thomas Davenport of the U.S.A. and
Scotsman Robert Davidson were amongst the first to invent more applicable
automobiles, making use of non-rechargeable electric batteries in 1842.
Development of roads made travelling comfortable and as a result, the short
ranged, electric battery driven automobiles were no more the best option for
travelling over longer distances.
The Automobile Industry finally came of age with Henry Ford in 1914 for the
bulk production of cars. This lead to the development of the industry and it first
begun in the assembly lines of his car factory. The several methods adopted by
Ford, made the new invention (that is, the car) popular amongst the rich as well
as the masses.
According the History of Automobile Industry US, dominated the automobile

markets around the globe with no notable competitors. However, after the end
of the Second World War in 1945, the Automobile Industry of other
technologically advanced nations such as Japan and certain European nations
gained momentum and within a very short period, beginning in the early 1980s,
the U.S Automobile Industry was flooded with foreign automobile companies,
especially those of Japan and Germany.
14
The current trends of the Global Automobile Industry reveal that in the
developed countries the Automobile Industries are stagnating as a result of the
drooping car markets, whereas the Automobile Industry in the developing
nations, such as, India and Brazil, have been consistently registering higher
growth rates every passing year for their flourishing domestic automobile
markets.
Automobile Industry Introduction:-

In the U.S. and around the world, the recession that started in late 2007 had a
profound impact on the automobile industry. America’s car and light truck
market dropped dramatically in 2008, to approximately 13.2 million units sold
for the year, down by about 2.9 million from the number of units sold in 2007.
In 2009, the market was much worse, with sales for the year totaling 10.4
million units. About 690,000 of those sales were made with the stimulus of a
“cash for clunkers” program paid for with federal dollars. This was easily the
worst year in decades for the car business, with two giant manufacturers filing
for bankruptcy, GM and Chrysler, while a large number of dealerships,
suppliers, parts manufacturers and other auto-related businesses also failed.
Estimates of the worldwide automobile market vary substantially from one

group to another. Scotiabank Group estimated that 53.96 million new cars and
light trucks would be sold globally during 2010. Analysts at R. L. Polk & Co.
estimated 2009 global sales of cars and light trucks at 61.9 million, down by
5.1% over 2008.
As widely expected, GM filed for bankruptcy in mid-2009, and was promptly

put back in business by a massive federal bailout. Chrysler’s significant
financial problems led it to file for bankruptcy protection in April 2009. The
company secured a large federal bailout and new financing from the U.S.,
Canadian and Ontario governments. This enabled it to quickly emerge from
bankruptcy in a new structure with help from Italian carmaker Fiat, which
initially owns about 20% of Chrysler. Fiat will have the right to earn additional
15
shares in the company if certain goals are met, which could lead to Fiat owning
a controlling stake. Labor unions received significant stakes in both GM and
Chrysler as part of their reorganization. Outside of the U.S., Toyota received
some financing from the Japanese government, and car makers throughout
Europe and Asia were seeking concessions and/or financial aid.
Analysts at RL Polk expected 2010 car and light truck sales in the U.S. to total
approximately 11.5 million units.
The biggest upward trend in auto sales for 2009 and 2010 was in China, where
government stimulus helped dealers to sell about 13.6 million units in 2009 and
an expected 14 million in 2010. China has become the world’s largest car
market, and RL Polk expects it to hit 17.5 million units in 2015.
biggest winner in this tumultuous environment has been Korea, where Kia and
Hyundai have enjoyed soaring global sales, as consumers are attracted to their
reasonable prices, excellent warranties and world class manufacturing quality.
Korean car makers are competing aggressively against leading Japanese firms.
are approximately 250 million vehicles in operation in the United States.

Around the world, there were about 1 billion cars and light trucks on the road in
2010.
years of 2004 through 2006 will long be remembered as a pivotal period in the
automobile industry. It was a period during which high gasoline prices finally
created significant demand among U.S. consumers for fuel-efficient vehicles.
Gasoline prices of approximately $2.00 per gallon started taking a huge bite out
of family budgets in 2004, and many middle-class consumers who owned fuel
guzzling SUVs and pickup trucks began to wish they had vehicles that were
much less expensive to operate. By 2005-2006, with gasoline prices in the $3.00
range, the party was over for large SUVs and family trucks.
major car makers will be aggressively pushing their smaller, high efficiency
vehicles in 2011-2012. GM is betting heavily on its Chevrolet Cruze, a small
sedan capable of 36 mpg on the highway and stuffed with convenience features
16
that consumers will appreciate. Ford’s revamped Fusion earned rave reviews in
the 2010 model year, and it comes in either a hybrid model or a standard engine
version that gets 31 mpg on the highway. Chrysler will be relying heavily on its
relationship with Fiat for new, fuel efficient models.
result of high gasoline costs and frugal consumers has been strong demand for
Toyota’s Prius gasoline-electric hybrid car over recent years. Also, Toyota
made investments in its Georgetown, Kentucky plant to enable it to
manufacture hybrid Camrys. There has also been good demand for Toyota’s
Lexus RX hybrid crossover. Ford launched its hybrids, and other carmakers,
including GM, are making their own efforts to bring more hybrids to the
market. However, consumers generally aren’t as impressed with U.S. hybrid
technology as they are with that of Toyota models, and actual mileage results on
the road are often disappointing, largely due to driver habits such as quick
acceleration which uses more fuel. Hybrids are now available from a wide
variety of makers, and technology has steadily improved.
of the most important trends will be rapid growth in plug-in hybrids (PHEVs)
and electric vehicles such as GM’s Volt, which will debut as a 2011 model.
This car includes a gasoline-powered generator capable of charging its batteries
for those occasions when it is not convenient to plug in. Tremendous
improvements in battery technology will soon come to market, further
enhancing this trend. Nissan offers strong competition in the electric vehicle
sector, with the launch of its 2011 all-electric model called Leaf.
consumers and emissions regulators are taking a renewed interest in advanced

automobile technologies. Clean diesel engines, like those offered in new cars
from BMW, Volkswagen and Mercedes-Benz, offer exceptional performance
and fuel economy while providing quiet, vibration-free running similar to that
found in gasoline-powered cars. Clean diesel offers a particularly attractive
alternative to hybrid technology for those who seek fuel efficiency, and it is
already widely used in passenger vehicles in Europe. The use of ethanol as a
gasoline additive in America has grown rapidly, regardless of whether it makes
17
any environmental or economic sense, thanks to requirements enacted by
Congress, backed up by massive government subsidies.
are keenly interested in quality and serviceability in the cars that they acquire. A
stumble in this regard can have devastating consequences for a car maker, as
seen in Toyota’s recent quality problems that led to slow sales, massive recalls
and a humble apology from the firm’s leader.
, sales of heavy SUVs have lagged miserably. Ford cancelled production of its
larger-than-life Excursion SUV in which some owners reported getting as little
as 11 mpg in the city, and GM dumped its Hummer line of SUVs, selling it to a
Chinese firm.
The rising affluence of consumers in China is creating both huge opportunities

and huge problems. China has become one of the world’s largest importers of
petroleum products, largely to fuel its burgeoning fleet of cars and trucks.
Streets and highways are clogged with cars, to the extent that traffic and smog
are nightmarish. Automakers from abroad have raced to establish plants and
partnerships in China, with the aim of producing cars both for domestic use and
for export. In fact, low labor costs and increasing product quality in China
threaten auto plants located in high cost nations such as the U.S. Today, more
cars are sold in China than in any other nation, and strong markets have
emerged there for everything from inexpensive sedans and vans to Cadillacs
and German luxury cars. One of the brightest trends for GM in 2009-2010 has
been its great success in selling cars in China.
India has also seen significant growth in its automotive sector. During 2009,
local industrial giant Tata launched, with great success, a no-frills car called
Nano at a price equal to less than $2,500 U.S dollars.
to be overlooked are the vast changes taking place in automobile manufacturing

plants. Flexible factories have reduced man-hours and cut costs per car, while
offering a much wider range of choices for customization to consumers. Today,
more than ever, car manufacturers and their suppliers are cooperating in the
18
design and manufacture of new cars in ways that are revolutionizing the entire
process.
cars manufactured in China will soon be on the market in many nations. The
question is not whether China will export cars and trucks, but whether
consumers in markets such as America will be convinced that they offer safety
and reliability. Meanwhile, U.S. automakers have made intense demands on
their component suppliers for lower prices—these suppliers are, in turn, looking
to low-cost production in China and other emerging nations.
manufacturers are facing challenges of their own. High costs, tough labor laws,
daunting government regulations and a few disappointing model designs have
hampered recent results. Meanwhile, European markets suffered from the
general economic slowdown, leading to poor automobile sales results.
Progressive Insurance Automotive X PRIZE offered $10 million in prizes to the

competitors able to create viable passenger vehicles capable of operating at the
equivalent of 100 miles per gallon. The competition is in conjunction with the X
PRIZE Foundation. Of the 111 teams entered, seven remained in final
competition. The winners, announced in September 2010, were Edison2, a
Virginia-based team of racing engineers who designed and built a four-seat car
that gets 102 mpg; Li-ion Motors, a North Carolina firm that produced a two-
seat vehicle; and X-Tracer, a Swiss company who produced a motorcycle-type
vehicle called the E-Tracer. Edison2 won $5 million, while Li-ion and X-Tracer
won $2.5 million each.
19
Automobile Marketing in India:-
The competitive nature of the automobile industry has prompted the companies
to take up new and innovative marketing strategies to thwart the competition.
The B segment of cars is the segment which sees maximum competition as the
consumer has a number of models to choose from and it's the volumes which
drive the margins.
All the companies as a part of their marketing strategy offers a range of vehicles
in all the segment to make sure that the customer is driving one of their vehicles
only.
Advertisements on the Audio visual medium are a rage as it gives the car
makers an opportunity to flaunt their cars. Flashy cars can be demonstrated on
television but when it comes to the finer prints of the cars, print and online
media comes to the rescue.
The online medium offers a greater flexibility to the car companies since they
come with a lot of interactive features like demonstrating the interiors of the car
with its salient features.
The print medium on the other hand provides an opportunity to the car makers
to explain the function of a car in detail.
Celebrity endorsements and testimonial advertisements have come a long way

and they are also doing their bit to sell the cars. Super star Shahrukh Khan has
been associated with Hyundai Motor Company for a long time and he comes
regularly on television to promote the Santro car. Similarly Ford has roped in
Junior Bachan for the promotion of the latest offering from the company Ford
Fiesta. On a similar note Saif Ali Khan and Rani Mukherjee is shown chasing
each other with a Chevrolet aveo.
Aamir Khan who is considered to be one of the most talented actors in the
industry is frequently seen changing roles on screen to promote the Toyota
Innova, a car which is generations ahead of its predecessor Toyota Qualis.
Cricketers haven't been left behind in the race of promoting cars; Fiat Palio had
received a great thrust when the promotion of the car was taken up by the
batting maestro Sachin Tendulkar.In addition to the publicity and advertisement
which is done by the companies there are certain innovative strategies which are
taken up by the companies to beat the competition from time to time.
20
CHAPTER 3
Small Car Market
Introduction:-
Rising incomes, better financing for vehicles and improved roads are the
combined drivers for strong growth of the automotive sector India. In the fiscal
year 2006-07, the domestic passenger car market grew up by 20 percent,
making India one of the fastest growing passenger car markets in the world in
absolute terms. The introduction of the low-cost small car concept Tata Nano
has generated much hype and generated discussion on the emergence of a
burgeoning global low-cost small car market. This study conducts a
comprehensive evaluation of India’s small car automobile industry and analyzes
its role as potential lead market for the low-cost small car concept.
India is likely to evolve into a global hub for small-car manufacturing.
Currently, India is one of the largest producers of small cars with the small car
segment accounting for about three-fourths of the Indian car market. The fast-
growing small-car market has encouraged several global auto leaders like
Renault,Nissan, Toyota, and Honda to announced plans for launch of small cars
in India. Maruti Suzuki India, largest passenger car manufacturer in India, has
more than sixty percent share of the domestic small-car segment.
History of Indian Auto Market:-
Following economic liberalization in India in 1991, the Indian automotive
industry has demonstrated sustained growth as a result of increased
competitiveness and relaxed restrictions. Several Indian automobile
manufacturers such as Tata Motors, Maruti Suzuki and Mahindra and
Mahindra, expanded their domestic and international operations. India's robust
economic growth led to the further expansion of its domestic automobile market
which attracted significant India-specific investment by multinational
automobile manufacturers. In February 2009, monthly sales of passenger cars in
India exceeded 100,000 units.
Top 10 Small Cars in India Under 5 Lakhs

21
1) Maruti Suzuki Swift:-
The Swift's launch has been Maruti’s trump card, and since its launch in the
country it has totally changed the scenario of the Nation’s car market for some
time to come. It is an attractive upgrade for small car owners and the clever
pricing makes it fantastic value for money. It is highly desirable, fun to drive,
and very cool. The 1.3L engine generates 87 bhp in the petrol version and 75
bhp in the diesel version with estimated fuel economy as 11/13 km/l
(city/highway). The cabin is well designed and controls are well laid out which
gives the interior a classy look.Swift comes with a 5-speed manual transmission
with cable-shift mechanism.
The Maruti Suzuki Swift LXi, VXi and LDi models range from Rs.4,17,000 -
4,78,000 approximately, ex. showroom Mumbai, while the higher end models
can go upto almost Rs.6 lakh.
2) Chevrolet Aveo U-VA
The Chevrolet Aveo U-VA is the all-new hatchback that offers excellent
comfort and great fuel economy. The cabin provides quite comfort and offers
adequate space for passengers and cargo. Jewel type headlamps with full-
chrome bezels and a huge horizontal grille are designed to grab attention. This
small car comes in three variants in India - 1.2, 1.2 LS, and 1.2 LT with an
option pack. All variants are powered by a 1.2-liter petrol engine that delivers
75 bhp. A 5-speed manual transmission is standard across all variants. Spacious
22
interiors and comfortable seating with easy-to-access controls makes it a user
friendly car.
The 1.2, 1.2 LS range from approximately Rs.4,24,000- 4,68,000 ex. showroom
Mumbai, while the 1.2LT and 1.2 LT Option pack go up to Rs.5.5 lakh.
3) Hyundai i10
Compact cars being India's favourite, Hyundai has chosen the right place to
launch it's i10 model. The wheels pushed out to the corners to maximize interior
space. i10 is available in two major choices: iRDE and Kappa. This wide and
smart small car steals the hearts of many car enthusiasts with its eye-catching
design. The 5-speed manual transmission is standard with a choice of two
engines: 1.1L iRDE I4 and 1.2L I4. i10. The car gives an impressive fuel
economy of 12/15 km/L (city/highway). It offers a good number of convenience
features, upscale interior, and superior technology that no other hatchbacks can
offer at an affordable price. It also offers an optional anti-lock braking system
for increased safety.
The price starts at Rs 3,41,000 (ex-showroom Mumbai).
4) Tata Indica Vista

23
Tata entered the car market in 1998 with the launch of the Indica. Earlier this
model had some flaws and was notorious for breaking down, until Tata
launched an improved version in the form of Indica V2 and the Xeta. Now it
comes with an even newer face the Indica Vista. Indica Vista is a more
powerful small car from Tata Indica segment with enhanced interiors, improved
quality, and better performance is built on a completely new platform. This new
model is available in 3 variant in India: Aqua, Aura, Terra, offering a choice of
3 engines : 1.4L TDI (Diesel), 1.2L Safire (Petrol) and 1.3L Quadrajet (Diesel).
Versatile and roomy interiors with contemporary styling features like two-tone
dash board, two DIN stereo system and the breakthrough central Instrument
cluster assures utmost comfort.
The prices for the different variants range from Rs 3,53,000- Rs.4,99,000 (ex-
showroom Mumbai).
5) Maruti Suzuki A-star
The global compact car A-star is produced exclusively in India. It's available in
3 variants - LXi, VXi, and ZXi. A low wide grille, large hood, and eye-shaped
headlamps add elegance to the car. A spacious cabin with an aero-dash and well
integrated audio system are highlights of this global car. The sporty hatchback
has a combination of current and futuristic design to leave viewers spellbound.
Ex-Showroom Mumbai Price starts from Rs. 3,48,000 for the LXi to
Rs.4,14,000 for the Zxi model
24
6) Hyundai Getz Prime
The new premium hatchback, Getz Prime, is the inimitable fusion of

sophistication, high-performance, appealing style, and incredible comfort. This
car is labelled as India’s first true world car that meets global standards in terms
of performance and comfort. The Prime comes with a 5-speed manual
transmission and an estimated fuel efficiency of 12/15 km/l (city/highway). It is
one of the most spacious cars in its segment. A tilt steering ensures easy
maneuvering.
The prices start at Rs 3,80,000 (ex-showroom Mumbai).
7) Fiat Palio Stile
The Fiat Palio Stile is a blend of elegance, practicality, comfort, and safety. This
car offers a choice of 7 variants in India with 3 engine choices. A refined 5-
speed manual transmission is standard. All variants come with redesigned
headlamps, bumper, and tail lamps besides a double-foldable rear seat and a
rear parcel shelf. The interiors are well crafted with a sporty instrumentation
25
cluster, comfortable seating, and ample storage area.
Prices range approximately from Rs.3,35,000- Rs.4,70,000 (ex. showroom

Mumbai)
8) Maruti Suzuki Zen Estilo
The new Zen Estilo hit the roads in India by replacing the decade old Maruti
Suzuki Zen with an upscale roomy interior and a powerful engine. The fusion of
style and urban chic imbibes an imposing feel with a luxurious fascia. This
trendy and smart car is built on a Monoform Aerodynamic design that allows it
to cut through air current. Available variants include the LX, LXi, and VXi. An
ergonomic interior is coupled with a highly proficient cooling system, front and
rear seat adjustable head restraints, and a front seat back pocket for added
comfort.
Prices start at approximately Rs.3,02,000 (Ex-showroom Mumbai).
9) Chevrolet Spark
26
The Chevrolet Spark is a customized hatchback of the earlier Matiz from GM.
The first striking feature in the Spark is its unconventional interior layout with a
gracefully designed, clear, and easy-to-read instrument panel placed in the
center of the dashboard. Flexible seating options with spacious head and leg
room make the drive comfortable. It has four petrol variants in India: 1.0,
1.0PS, 1.0LS, and 1.0LT. This hatchback is powered by a 1.0L S-Tec I-4 engine
that generates 63 bhp. A 5-speed manual transmission is standard across all
variants. Its striking design, agility, and host of features distinguish the Spark
from its rivals. Due to its compact size, it is easy to handle and best suited for
city driving.
The starting price tag is from Rs.3,25,000 (ex-showroom Mumbai).
27
10) Hyundai Santro Xing
Hyundai Santro can be termed among the most popular cars in the country with
its appealing look, superior handling, and well-appointed interiors. It is built
with an eRLX 'active intelligence' technology engine that delivers impressive
power and performance. The Santro Xing is available in nine variants. Santro
Xing comes with a 5-speed manual or a 4-speed automatic transmission. A
three-spoke power steering wheel with central locking and front power
windows was the selling point when Santro was first launched.
The starting price tag is Rs. 2,56,000 and it can go upto Rs.3,97,000 (ex-
showroom Mumbai).
28
MAJOR PLAYERS:-
Maruti Suzuki:
will launch a new small car with a 1 litre engine, reports CNBC-TV18's Swati
Khandelwal quoting sources. The launch is expected by July or early August
and will sport a KB Series engine. Sources say the car is likely to be priced in
the range of Rs 2.75-3.25 lakh.
Maruti had in the month of May clocked a sale of 1.02 lakh units compared
to79,872units in the
year aged period. Earlier in

the month of April, it had sold 93,078 units.In an interview to CNBC-TV18, the
company's CEO Marketing , Mayan Pareek had said that the top 10 cities were
seeing a 25% industry growth. He had said that in the A2 segment Alto had the
highest sale in May followed by Swift.
Maruti, the largest small car manufacturer in the country with over 50% market
share hopes that this car will fit in between the Alto and the Spark, the two
small cars in the lower end of the equilibrium.
The new car is expected to pre-position or replace the Alto as far as the numbers
are concerned. The car, sources said, will be a global product with parts of the
design being picked up from Servo a 650cc Japanese car.
Rendering – Hyundai H800 small car for India:
We brought you spy pics of the Hyundai H800 small car for India day before
yesterday. We simply couldn’t stop trying to get details about the small
Hyundai being tested under heavy camouflage. We had a detailed discussion
with our avid follower who caught the mule. We were told the car looked taller
than an Hyundai i10 and had the i10’s headlamps.
After hours of observations and estimations, we passed on our thougths to our

‘Design Director’ SRK, who almost instantly came up with this rendering of
what the new Hyundai small car could look like.
Here are our observations of the spied Hyundai H800 small car that translated
into this rendering. The car looked taller but narrower than an i10. The car had a
plain side walls (signs of a low cost car). The camouflaged car has an
interesting design element in the rear, the rear tail lamps (a white element
sandwiched between two red elements vertically) were extended a little form
29
the rear windscreen. The Nissan Micra and the new 2011 Maruti Swift could
have such a design but the lamps were positioned a bit higher, so it cant be a
Micra and the lamps weren’t as edgy as the Swift, so it is neither.
The observed profile at the rear look dangerously close to the previous
rendering of the Hyundai H800 we had showed you (though the styling looked
too futuristic the profile is the same).
As all Hyundais are, the sides of the car would look plain but interestingly
styled nose and rear would manage to make the car look better. The sped car
had the same traits.
The car could come with a small 800cc engine developed by Hyundai and
would compete with the Maruti Alto and the upcoming 800cc Chevrolet Spark.
Tata motors may roll out 800cc small car by 2012
At concept stage, vehicle to fill Nano-Indica gap.Recognising the need for a

larger presence in the mass volume A2 segment, Tata Motors Ltd is understood
to be developing a new small car.The country’s largest auto maker, which is
developing the car internally, plans to sell the model between its smallest Nano
and hatchback Indica models.The car, code-named “Dolphin”, is likely to be
launched in the next 18-24 months, an industry source said today.“The car is
expected to be powered by an 800cc or 1,000cc engine, and will be strategically
30
placed in the A2 segment like Maruti Suzuki’s WagonR and Hyundai i10,” the
source said.He said the car is likely to be priced around Rs 3.5 lakh.When
contacted, a Tata Motors spokesperson declined to comment on the matter,
describing it as market speculation.Theindustrysource said the car would be
developed on an all new platform. The Indica currently comes fitted with a 1.3L
diesel and a 1.1L petrol engine. The Nano has a 663cc petrol engine.The A2
segment, that comprises more than 70 per cent of the country’s passenger car
market, includes 20 models from various auto makers.Maruti Suzuki has the
biggest presence in the A2 segment, with as many as six models, compared with
Tata Motors’ one. The segment is witnessing increased interest in the country,
with auto makers scrambling for a significant share in the pie.Tata Motors,
India’s largest commercial vehicle maker, currently sells just one hatchback in
the A2 segment and two in the mid-size segment.It also sells the Safari and the
Sumo in the utility vehicle category.“Perhaps Tata Motors is looking to plug the
gap between the Nano and the Indica in its portfolio,” the source said.Moreover,
there is likely to be a vacuum in the lower A2 segment after Maruti Suzuki pulls
out its M800 and Alto models. Both models are fitted with an 800cc
engine.Alto, incidentally, is the largest selling car model in India. Due to the
introduction of the Bharat Stage-IV emission norms, both M800 and Alto
models have been rendered outdated in 13 major cities from April.Maruti has
said it would eventually discontinue the M800 altogether, as any new
investment in the over 25-year-old model would make it unviable.The company
is also planning to launch a successor to the Alto that would have the latest 1L
engine, thereby leaving the 800 cc space.Though Tata Motors has not specified
any timeframe for the new model rollout, the industry source said the company
has sent sample drawings of the proposed new model to component vendors,
seeking their “requests for qualification” documents.“We don’t even know
whether it will be a petrol or a diesel model, or if it would have both. There is
still no clarity on it,” he said.
31
CHAPTER 4
SMALL CAR MARKET IN INDIA
INTRODUCTION:-
The small car market in India is growing like never before. 70 per cent of the
cars that are produced or come into India every year are small and compact.
Indian automotive majors like Tata Motors and Maruti Udyog are leaders in this
segment and have been posing a strong competition to other car makers. In
terms of design, novelty, value for money, and technology, the small car market
in India has improved a lot. The current year has been very significant in India's
automotive history due the high sales in the first few months, thanks to this
year's new compact car launches.
The demand for compact cars in the country has been so great that car makers
are not just coming out with new models but also giving their existing cars a
facelift. This has been further increasing sales. Volkswagen, Ford, Chevrolet
and Maruti are all in the game and have been trying hard to win over compact
car buyers in India with their novel products. JD power statistics show a steady
growth in the number of these little car buyers. It was 24 per cent last year and
has increased to 32 per cent this year. Experts believe that the A2 car segment is
set to expand even more.
The most significant change is the movement of the two-wheeler buyers

towards compact cars. First-time buyers in India opt for the Rs 3 lakh-plus
category instead of sub-compact cars. Car makers have invested a lot to please
these Indian buyers. Great cars at low prices. Who wouldn't prefer them to the
bikes and scooters? Surprisingly, even auto majors like Chevrolet and Ford
have realized the need of having a prominent presence in the small car market
and have come up with new cars that possess features and pricing right enough
to suit the Indian crowd.
The base model of the Chevrolet Beat can be availed at Rs 3.34 lakh while the
Figo can be bought for Rs 3.49 Lakh. Volkswagen sells the Polo at Rs 4.42
Lakh. Not to mention, the Indian auto market leader has enough and more cars
in its portfolio. Despite this fact, Maruti will be bringing in more cars. The
Toyota Etios too has been scheduled for some time this year. So, we now know
that the market for the small automobile in India is getting flooded with too
many launches, but luckily there are buyers.
Projections say that the Indian roads may be home to around 24 small
automobiles this year. The sales figures of these cars are showing steep climbs.
32
Talk of fuel economy or maintenance of cars. The small cars belonging to the
A2 segment emerge as winners. A majority of Indians have begun realizing this
and car makers too have been working towards pleasing such Indian buyers.
The bigger luxury cars do not really the humpy bumpy roads in India. It is the
small car market that has been showing tremendous growth and so shall it be in
future. The small car market in India is witnessing the maximum activity and is
all set for more exciting times ahead, with more players from India and abroad
joining the race.
India's small car market drives the global biggies

Honda has named India the "lead country" for its global small car which is
expected to debut in two or three years. This is part of the Japanese automaker’s
strategy to create models for lead countries and modify them appropriately for
other global markets. For example, Japan was the lead country for the Jazz.
The reason for Honda’s India inclination is obvious: the country has become the
second-largest maker of small cars, overtaking Brazil (Japan is number 1, but
the gap is narrowing). Small cars account for 80 per cent of the domestic market
(up from 75 per cent last year) and exports are growing at top speed. According
to the Society of Indian Automobile Manufacturers, small car exports rose 53
per cent between April and September to 1,97,249 units against 1,29,090 units a
year ago.
Little wonder, then, that last Monday, Japan’s Suzuki Motor said its annual
operating profit would be four times its original forecast because of strong India
sales. South Korea’s biggest automobile maker Hyundai Motors also admitted
its growth has been buoyed by small car sales in markets like India.
Hyundai recorded more than half of sales from China and India and Toyota saw
around a third of sales coming from emerging markets.
Analysts say domestic growth rates for small cars have been boosted by the
government’s efforts to combat the fallout of the financial meltdown in the
second half of 2008. As a result, taxes on small cars — defined according to
length and the size of the engine — were cut to 8 per cent.
Hyundai Motor India Senior Vice-President (marketing & sales) Arvind Saxena
says the economic slowdown of the past one year has reinforced consumer
preference for fuel-efficient and inexpensive small cars.
Almost a quarter of Hyundai’s repeat customers now own two small cars,
Saxena added. In the past, the second purchase was invariably a mid-sized
sedan.
33
That’s precisely why manufacturers, like Nissan Motor Company after the
meltdown forced it to shut plants overseas, are investing in emerging markets.
Nissan is eagerly waiting to launch its new mini-car that will debut in India
before the Europe, US and even Japan.
The company, which is Japan’s third-largest car company, is making India the
production hub for the yet unnamed compact car due to be launched in May. It
will export to more than 100 countries from its plant in Chennai that has an
annual capacity of 400,000 units.
BATTLE FOR INDIA’S SMALL CAR MARKET
Toyoto
says it
aims to
capture
10 per
cent of
India's
car
market
in the
coming
years
[Reuter
s]
India's auto show has opened in New Delhi with the battle for share of the
small car market taking centre stage.
34
AutoExpo 2010, which runs in the Indian capital until January 11, features 10
global releases of vehicles designed for India.
International auto manufactures, including Toyota, Honda, Volkswagen and

General Motors, on Tuesday unveiled new compact car models in a bid to break
the dominance of local producers in the country's rapidly expanding market.
Maruti-Suzuki, the Indo-Japanese producer, holds 55 per cent of the market

share, with India-based Mahindra & Mahindra and Tata Motors dividing the
rest.
India's car market is growing at a rate of more than 10 per cent a year, with
small vehicles accounting for 80 per cent of all sales in the country.
It also recently overtook Japan as the largest market for compact or sub-
compact cars, according to JD Power and Associates, a marketing information
firm, and experts say the world's second most populous country is quickly
becoming a hub of small-car manufacturing.
Tata announced over the weekend that its December sales more than doubled to
51,627 units owing to a recovery in the industry. Its sales during the month
recorded a growth of 105 per cent compared with sales in December 2008.
'Triple' sales:-
Toyota and Volkswagen (VW) both say they aim to capture 10 per cent of
India's auto market in the coming years.
VW unveiled at the show its locally-made Polo - a compact hatchback due to hit
India's roads in March, and meant to go head-to-head against Maruti-Suzuki's
Swift.
"In terms of total volume of sales we are not a big player, but this will change
it," Lutz Kothe, VW's India marketing manager, said.
Toyota was also showing off its first compact model designed specifically for
the country's buyers, called the Etios. Toyota says the model features adapted
suspension for India's rough roads, plenty of storage space for large families
and an engine tailored to city driving.
The Japanese manufacturer's plan is to export the car from India.
35
Total car sales for India are forecast to reach two million this year and triple in
the next decade, according to industry estimates.
Maruti-Suzuki, which is majority-owned by Japan's Suzuki, said it was aware of

the pressure it faced from outside competition.
"We are trying to expand our portfolio and refresh our products to offer
customers new cars," IV Rao, senior director at the group, said.
Struggling US automaker GM was hoping its new $7,000 compact, the Beat,
would boost its India sales by 30 per cent this year.
The company had announced on Monday that GM' vehicle sales in China last
year jumped 66.9 per cent from a year earlier

The Delhi Auto Expo, which began on Wed, Jan 06, 2010 is
turning out to be one of the most important movers of the
Indian car market. Yesterday, the first day of the expo, saw
global majors Toyota, Honda and General Motors
announcing their entry into the small car market in India.
These new entrants have only stepped-up the already brewing small car battle in
India.
India as global small car hub

V Sumantran of auto component major Hinduja Automotive believes that the
prospects for the small car industry in India are so bright that there is a big
change for India to be the global hub for small cars.
36
Stimulusaids:-
But the fact remains that the recent government stimulus has played a big role
in this small car boom. According to Sumantran, the Indian small car segment
has been helped by government incentives. Jagdish Khattar of Carnation Auto
also warns that car prices were likely to go up on withdrawal of stimulus.
Market leader Maruti faces the heat

Currently the small car market in India is dominated by local player Maruti
Suzuki, but that could soon change. Jagdish Khattar said in an interview to
CNBC-TV18 that now with all major players in the small car segment, it will be
a challenge for Maruti to hold market share. However he believes it will take at
least 8-12 months for the new players to establish themselves and Maruti
wouldremain the market leader, albeit with lower market share.Sumantran also
agrees, "Domestic companies will face stiff competition. This sort of price war
may have some effect on the financial of small car players”
37
India's Small-Car Market Comes of Age

By Barbara McClellan
Ward's AutoWorld, Nov 1, 2007 12:00 PM
News that Wal-Mart Stores Inc., the world's largest retailer, recently signed a
joint-venture pact to sell goods in one of the world's most populated countries
comes as no surprise to the global auto industry, which is witnessing firsthand
the passage to India becoming more crowded by the day.
Despite its relatively primitive stage of development, India sold 1.4 million
passenger cars last year, up from 675,116 in 2002, the Society of Indian
Automobile Manufacturers says. Although passenger-car exports quadrupled in
the period, they represent only a scant portion of overall sales.
ADVERTISEMENT
Yet the market is far from saturated. A mere 0.7% of Indians own vehicles, a
recent study by Maritz Research GmbH shows. This is less than in China, with
1.2 vehicles per 100 inhabitants, and in Germany, Japan and the U.S., where at
least one in two people own cars. Thus, India's market potential is huge.
Global Insight Inc., an automotive research firm, predicts India will be among
the global auto industry's top-six countries — along with the U.S., Germany,
China, Japan and Korea — that will account for 60% of worldwide production
in 2012.
But as India's market accelerates, so do international concerns over vehicle

emissions and demands to fight global warming. The country is among the
world's heaviest greenhouse-gas emitters, pushing its auto industry to put
greater focus on fuel efficiency and small cars.
While India is placing its domestic powertrain emphasis on biodiesel and

compressed natural gas, it also is growing more cognizant of the global
industry's tightening fuel economy and emissions laws as it cultivates its
reputation as small-car export-production hub.
However, the quest to build inexpensive cars and mini trucks currently driving
economic expansion has more to do with Tata Motors Ltd.'s decision to produce
its so-called “one-lakh” minicar, expected to retail for about Rs100,000
($2,500), than it does with fighting climate change.
38
Tata is being challenged by the Renault Nissan Alliance, which says it plans to
manufacture a competing minicar in India that will be priced about $3,000.
Renault SA already has seen considerable success in the country with its Logan
small car that is built throughout the world and sells for $6,000-$7,000.
Such developments in India have inspired auto makers worldwide to focus on

entry-level models. Fiat Automobiles SpA, for example, recently launched its
500 model in Europe; Mitsubishi Motors Corp. is expanding sales of its popular
“i” car to India; and China's Chery Automobile Co. Ltd. is making a worldwide
push with its tiny QQ model, as well as its tie-up with Chrysler LLC to build
small cars for export to the U.S.
Chrysler's new head of Asia operations, Phil Murtaugh, recently was quoted
saying, “India is our second highest priority after China.” General Motors
Corp., which sued Chery for copying its Chevy Spark, has seen much success
with its minicar in India this year.
Auto makers insist these new small cars are not glorified motorbikes or
stripped-down cars, noting prices will be kept affordable by sourcing
components from local low-cost suppliers and not by sacrificing features or
performance.
The movement down market is expected to make automobiles affordable for a

whole new class of buyer, analysts say. All eyes are on the “BRIC” countries:
Brazil, Russia, India and China, where buyers of motorbikes will be able to
afford entry-level 4-wheel vehicles.
However, building large numbers of cheap cars is only one step among many
India must take to fulfill its ambition to be among the world's top-10 vehicle
producing countries by 2015, beginning with a stronger partnership between
industry and government, a recent study by IBM and the University of
Michigan's Transportation Research Institute finds.
While developing inexpensive cars is a key growth strategy, other auto makers
already are leveraging the same economies of scale, the study says, adding that
India must overcome challenges in infrastructure, product quality, labor costs
and tax regulations to meet the demands of the global automotive industry.
The 30 high-level executive and automotive experts in India interviewed for the
study expect total vehicle sales to double to 2.8 million by 2010 and triple to 4.2
million by 2015.
39
India will remain a small-car market

Jagdish Khattar, Managing
Director of
Maruti Suzuki,
SONAL SACHDEV , ANURAG PRASAD
There has been speculation that you were mostly entrusted with the task of
seeing Maruti through the divestment and transitional phase?
People can interpret things in many ways. The management could have asked
me to quit in 2005, instead of giving me an extension. Even five months back, I
was offered an extension, which I declined to start something of my own. There
is still an offer to continue as a non-executive director. Our job is to see that all
the stakeholders in the company are happy, and I was always looking for new
opportunities and taking initiatives to achieve it.
How do you rate your tenure at Maruti?

It has been interesting and exciting. I started with marketing and moved on to
materials. I have seen Maruti going through rough times. But we have come
back and for almost seven years, our market share has exceeded 50%. There
was a complete change in the company's mindset. Changes were introduced at
the plant and vendor and dealer networks. Our dealers are making more money
now. We have entered into new businesses like insurance. Today, we can be
compared with any big auto name globally. My chaps are very good to carry on
the good work. I wish good luck to the new management.
Was it difficult to manage and balance Japanese and Indian

working styles?
The idea is to get the best of both worlds. There are differences but the
challenge is to harmonise both the cultures; marrying their style of functioning
with ours.
40
As a government nominee and former bureaucrat, did your style
of functioning clash with Suzuki's?
During my government days, I learned to concentrate on the assigned job. In
1995-96, even though I was a government nominee they were upset about my
style of functioning and had removed me from the board. But Suzuki nominated
me back. During the transition phase, I made sure that the entire process was
smooth and the operations did not get destabilised. I am an employee of Maruti
and will do anything for the good of the company.
The functional heads are all from Suzuki. They dominate the board also. Is
the presence of R C Bhargava (the new Chairman) to present an Indian
face to the team?
We have a good and experienced team in place. Bhargava is a very senior

person. He was one of the founders of the company and it is always good to
have a senior person in the team. Even the Managing Director, Shinzo
Nakanishi, is an old hand and has been deputed twice to India earlier. Also, a
company is not run by a single person. The leader is sometimes the follower. I
used to follow what others wanted and help them in what they wanted to do.
How involved were you in the firm's day-to-day affairs?

We have the process in place. We meet every Tuesday to discuss and review.
Was I a very hands-on person? You have to ask my colleagues about this. I
know where to delegate and where to intervene.
Times are changing in the small-car space. How is Maruti placed to take on
the increasing competition?
Maruti has evolved in different phases. The first was when it had a dominant
"Others have not been able to catch up, as we've been acting very fast.
We've stepped on the gas in every segment and
re-organised ourselves"
Position: The second was when I took over and the competition also came in.
We changed our business model during this time. We even went through a
strike for three months still we got 100% capacity. We carried out massive
restructuring after that and entered new businesses. There was a time when
dealers were ready to give up their dealership. Today, they are reinvesting. With
41
more competition coming and the market growing, the company is all set to
enter the third phase.
But, is the first-mover advantage still there for Suzuki?

At times, the first mover advantage makes you complacent, but for us, it ended
a long time ago. However, others have not been able to catch up because we
have been acting very fast. It is not that they are not trying. We have stepped on
the gas in every segment and re-organised ourselves. From 50 dealers and 60
showrooms we have grown to 250 dealers and 400 showrooms.
Taking on the competition is an evolving process and that is why I am talking

about the third phase. One team was involved in the second phase of the
company's growth; a new team will take it through the third phase. In the future,
more phases would come; things would change in this evolving market and we
have to change accordingly. But at the end of the day, you have to concentrate
on your network. You must listen to your customers, dealers, vendors and
employees. We have to focus on R&D and refresh our roadmap, these are
continuous processes.
In the absence of its own R&D, Maruti has been paying royalty to Suzuki.
Tata Motors and the Mahindras have developed models here. When can we
hope to see an indigenous model from Maruti?
Till five years back, even minor modifications were not being done here. We
have started that and more would follow. In Swift, we were involved from the
initial stages, and in this kind of work it takes time to develop models. Also it
would be wrong to compare ourselves with the Tatas and the Mahindras who
are Indian-owned companies and have worked for almost 30 years to develop
the cars. We are just a subsidiary of Suzuki; we never had our own R&D.
However, things are changing. Already, we have a test drive track equivalent to
that in Japan. Between Maruti and Suzuki, it is a two-way street. We can
conceptualise and still they can develop the cars. In the next five years, we
would be very strong in R&D. Whether we would do 100% or we would be a
dominant contributor is difficult to say. R&D needs trained manpower,
investment is not an issue and these things are easy to do. We have almost 110
engineers being trained in Japan and they would come back to work here. There
has to be lot of experience, exposure, handholding that has to happen before
things shape up.
Even though Suzuki has been trying hard to break the mini-car
company image, it has met with little success. What is the strategy
in India?
42
It is a global strategy and has worked well in India, too. Instead of being a
small-car maker, we wanted to be a complete carmaker. With the success of
Swift and SX4 and more such models to follow, we would be a complete car
company rather than a small-car maker. The new car launches would be across
the segments and would be good for the customers.
Big cars is just one segment, we would be strongly present in the large volume
segments. Growth has to be seen in terms of volumes. The numbers are still in
the small cars. More and more people are able to afford small cars now. India
will remain a small-car market.
How far is India from becoming the manufacturing hub for small
cars?
I believe, we would be exporting one million cars in the next three to four years.
I had said this some time back and no one believed it. I see no reason why we
cannot do it. The only problem is infrastructure, and the government is working
to improve that.
Of this, what will be Maruti's share?

By 2009-10, we would be exporting 150,000 to 200,000 cars from 50,000
currently. This is excluding Nissan's 50,000 cars being made by us. The focus
area would be Europe where our exports have almost been zero. The new
models would be export-oriented and would tie up with the capacity expansion
of the Manesar plant.
Any plans to ramp up your alternate fuel capacity?

Almost 10% of our capacity is LPG. These are Omni and WagonR. If fuel
availability improves, the demand for these vehicles will go up. It's a-chicken
and-egg situation.
How do you see the industry shaping in the next wave?

Lots of people have made announcements and that is why, we feel, going ahead,
things are going to change. Large companies entered the market to change the
dynamics but India forced them to change the way they think. It remains to be
seen to what extent the intentions and desires are converted into reality.
Small Car Market in India Will See New Entrants

43
April 12th, 2010
The buzzing Indian Small car market will see new model entries in the
upcoming years. General Motors has already introduced Chevrolet Beat in early
2010, Ford has introduced Figo and Volkswagen has launched Polo as their
small cars. Hyundai Motor’s new i20 diesel and Nissan Micra are some of the
new models expected in the current year. Early 2011 will be launch date of
Honda’s new small car and Toyota’s Etios.
More new car models will be introduced in the developing markets, particularly
India, apart from the latest developments in the international auto scenario.
Volkswagen-Suzuki joint venture is already thinking about developing a small
car for the Indian market where as Maruti Suzuki has already increased the
capacity of its R&D center in India. MSIL is planning to launch a special
“made-in-India” car by 2012.
Decision on India specific small car with Suzuki by 2011: VW
New Delhi, Oct 3 (PTI):
German carmaker Volkswagen, which holds 19.9 per cent stake in Suzuki
Motor Corp, is likely to finalise by the first half of 2011 on the development of
an India-specific small car with the Japanese firm.
"Small car, specifically for India, is one of the areas that we are discussing with
Suzuki... This decision for India will probably be taken by spring 2011,"
Volkswagen AG Chairman Martin Winterkorn told PTI.
He, however, did not specify whether the car will be positioned below the Polo,
Volkswagen's latest hatchback in India, although officials of the Indian arm of
the firm have confirmed that a small car is being planned below the Polo.
"India is very important for us. Volumes are growing in markets like India and
China," he added.
Volkswagen (VW) had last year picked up 19.9 per cent stake in Suzuki Motor
Corp (SMC) for USD 2.5 billion, following which the partners have been
exploring possibilities of joint production and vehicle design.
"We are discussing about engine development, hybrids for Japan and many
other issues," Winterkorn said, adding that he usually meets SMC Chairman
44
Osamu Suzuki in every three months.
He said VW and SMC are talking to share technologies to develop diesel

engines, which in future may come to the Indian market also.
Earlier top officials from both VW and SMC's subsidiary Maruti Suzuki India
(MSI) had confirmed that there is a possibility to jointly develop products,
including a contract manufacturing agreement, for the Indian market.
In May this year, top officials of MSI and VW India met to explore synergies in
production and vehicle design.
The two companies are exploring synergies in areas such as product design --
not necessarily sharing models -- and product testing, evaluation or part
designing of future models and special projects.
While SMC is keen to get VW's technology, the German firm is interested in
MSI's expertise in high volume production at a very competitive cost and
efficiency.
A new entrant in India, VW is yet to gain any firm ground. It has started
production in India from this year at its Chakan plant, where it invested around
Rs 3,500 crore, having a capacity to produce 1,10,000 cars a year.
In contrast, MSI is the largest brand with just less than 50 per cent in the 15
lakh units Indian car market. It is also ramping up its production capacity and
R&D division for developing cars for India and ASEAN region. It has
earmarked an overall investments of Rs 6,125 crore for
2010-13.
45
TOP 5 SMALL CAR 2010 IN INDIA
Top 5 small cars in India 2010 comprise of a few of the common names that are
found not only in the country but also in the world.
To start with let us give some background on the Indian automotive market. It is
quite interesting to know that India has the 9th largest automobile industry in the
world. Since 2009 India has been crowned as the 4th largest in Asia only after
Japan, South Korea and Thailand.
The Indian automotive industry was established 1940’s. What started as a
simple industry today that has transpired into something that big! After the
liberalization policy of 1991, India has not stopped neither has seen back.
The most popular cars of India and the top 5 small cars in India keep on
changing as they have been for the past few years. Well to be honest, the year
2010 has just started and we are still waiting for a few upcoming cars.
Small cars are convenient and that is why are very much in demand. They do
not need as much of parking space as bigger cars and can be parked very easily.
They have a smaller turning radius. In addition the pocket pinch is the most
important reason of all. They are not clumsy and are ideal for the nuclear
families of the new age India.
To name a few of the top 5 small cars in India 2010 we will be featuring those
cars that Indians are still eagerly waiting for or which have already arrived in
the past few months. Thes cars are priced between INR 4 - INR 6 Lakhs.
Here we go:
 Ford Fiesta Hatchback-


46


 Ford has finally decided to launch the Ford Fiesta Hatchback Car which
is priced between Rs. 5 Lakhs to Rs 6 Lakhs. It gives an option of 1.4-litre
petrol, 1.2-litre petrol, 1.6-diesel, and 1.4-litre
diesel as alternatives
.Honda Jazz-
This is a car which made lot of news when it was launched but its high price
caused its downfall. It costs around Rs 6.5 Lakhs to Rs 8 Lakhs. It has an engine
of 1.2 litre with 77 bhp. It is very spacious and a comfortable vehicle to ride on.
We hope that Honda brings in a price correction in 2010 and then this car car be
seen rolling on the Indian roads in each corner.
.Fiat Grande Punto-
47
It has a very good interior designed by Italian designer Giugiaro. It has both
versions diesel and petrol. It comes with a price tag between Rs 4.5 Lakhs to Rs
6 Lakhs. With this car Fiat is back in India with a bang !!

 Nissan Micra-

 Nissan Micra is going to be the next "Big" Small Car Launch in the
month of May 2010. Nissan Micra Car will come with a 1.2 Liter petrol
engine and a 1.5 Liter diesel engine. Both these engine varitants will sport 5
speed manual transmission & the mileage is expected to be around 25
Kmpl.
Hyundai i10-
48

 Hyundai i10 has been bestselling car for the Hyundai in the recent times.
The Car is priced around INR 4 Lakh with top model costing INR 5.5
Lakhs. Hyundai i10 has swung the fortune in favour of Hyundai India after
the grand success of popular Hyundai Santro Car. We might expect a new
i10 variant of Hyundai i10 in the last 2010.
49
CHAPTER 5
TATA NANO
INTRODUCTION:-
In March 2009: Tata Motors began selling its "one-lakh car", the Tata
Nano. The Nano brings the comforts of a car within the reach of thousands
of families that previously could not afford one. It is the cheapest car in the
world today with the standard version priced little more than US $2,000.
A rear-engined, four-passenger city car built by Tata Motors; it is aimed

primarily at the Indian market.
In 2008 the Financial Times reported: "if ever there were a symbol of India’s
ambitions to become a modern nation, it would surely be the Nano, the tiny
car with the even tinier price-tag. A triumph of homegrown engineering, the
$2,200 (€1,490, £1,186) Nano encapsulates the dream of millions of Indians
groping for a shot at urban prosperity.
Nano is the SI prefix for one-billionth, and the word is used colloquially to
mean "very small
History
The introduction of the Nano received much media attention due to its low
price.
Expectations
Many have had great expectations for the Nano some perhaps going a bit
too far. One study, by Indian rating agency CRISIL, thought the Nano would
expand the nation's car market by 65%.
Singur factory pullout

Main article: Tata Nano Singur controversy
Tata Motors announced in 2006 that the Nano would be manufactured in

Singur, West Bengal. Local farmers soon began protesting the forced
acquisition of their land for the new factory, and there was widespread
50
violence when police and farmers clashed in December, 2006. As the
protests continued through 2007 and 2008 Tata first delayed the Nano launch
and later decided to build the car at a different location in Gujarat, instead
Design
A Tata Nano in silver.

Seeing an opportunity in the great number of Indian families with two-
wheeled rather than four-wheeled vehicles, Tata Motors began development
of an affordable "one-lakh car" in 2003. The purchase price of this no frills
auto was brought down by dispensing with most nonessential features,
reducing the amount of steel used in its construction, and relying on low-cost
Indian labor.
The Nano's development was foreshadowed by the 2005 success of the low-
cost, 4-wheeled Tata Ace truck.
The car's exterior was designed at Italy's Institute of Development in

Automotive Engineering.
Cost cutting features

The Nano's design implements many cost-reducing innovations.
The Nano's trunk is only accessible from inside the car, as the rear hatch
does not open.
One windscreen wiper instead of the usual pair
No power steering, unnecessary due to its light weigh
Three lug nuts on the wheels instead of the usual four
51
Only one wing mirror
No radio or CD player
No air conditioning
No airbags
623cc engine has only 2 cylinders
Price
nnouncing the vehicle as the least expensive production car in the world Tata
aimed for a starting price of one lakh, or 100,000, rupees. This was
approximately US$2000 at the time.
Rapidly rising material prices (up 13% to 23% over the car’s development
time caused the car to be priced somewhat higher than 1 lakh (US$2,250).
Model versions
Tata Nano Europa

At its launch the Nano was available in three trim levels:
the basic Std priced at 123,000 (US$2,767.5) has no extras;
the deluxe Cx at 151,000 (US$3,397.5) has air conditioning;
the luxury Lx at 172,000 (US$3,870) has air conditioning and power

windows
52
Europa
This export version of the Nano was first shown at the 2009 Geneva Motor
Show Heavily upgraded to meet EU safety and emission standards, the car
will have a number of improvements over the standard Nano, including an
extended wheelbase, a new 3-cylinder engine, power steering, an anti-lock
braking system (ABS) and an improved interior and exterior The Nano
Europa will be more expensive, heavier, and less fuel efficient than the
standard Nano with prices said to be around US$6000.
Technical specifications
The Nano is a 35 PS (26 kW; 35 hp) car with a two-cylinder 624 cc rear
engine.
The car complies with Indian emission standards and can also meet
European emission standards as well.
Engine: 2 cylinder petrol with Bosch multi-point fuel injection (s

injector) all aluminium 33 horsepower (25 kW) 624 cc (3
Value Motronic engine management platform
from Bosch
2 valves per cylinder overhead camshaft
Compression ratio: 9.5:1
bore × stroke: 73.5 mm (2.9 in) × 73.5 mm (2.9 in)
Power: 35 PS (26 kW; 35 hp) @ 5250 rpm
Torque: 48 N·m (35 ft·lbf) @ 3000 +/-500 rpm
Layout and Transmission Rear wheel drive
4-speed manual transmission
Steering mechanical rack and pinion w/o servo
Turning radius: 4 metres
Performance Acceleration: 0-60 km/h (37 mph): 8 seconds
Maximum speed: 105 km/h (65 mph
Fuel efficiency (overall): 23.6 kilometres per litre (4.24 l
100 kilometres (66.6 mpg-imp; 55.5 mpg-US))
Body and dimensions Seat belt: 4
Trunk capacity: 150 L (5.3 cu ft)
Suspension, Tires & Brakes Front brake: 180 mm drum
Rear brake: 180 mm drum
Front track: 1,325 mm (52.2 in)
Rear track: 1,315 mm (51.8 in)
53
Ground clearance: 180 mm (7.1 in)
Front suspension: McPherson strut with lower A arm
Rear suspension: Independent coil spring
12-inch wheels
Supplier Part/system
Texspin Clutch Bearings
Oxygen sensor, Gasoline injection system (diesel will follow),
Bosch
alternator, brake system
Continental AG Gasoline fuel supply system, fuel level sensor
Caparo Inner structural panels
HSI AUTO Static sealing systems (Weather Strips)
Delphi Instrument cluster
Denso Windshield wiper system (single motor and arm)
FAG Kugelfischer Rear-wheel bearing
Federal-Mogul Pistons, Piston rings, Spark plugs, Gaskets, Systems protection
Rear-view mirrors, interior mirrors, manual and CVT shifters,
Ficosa
system
Freudenberg Engine sealing
GKN Driveshafts
INA Shifting elements
ITW Deltar Outside and inside door handles
Johnson Controls Seating
Mahle Camshafts, spin-on oil filters, fuel filters and air cleaners
Saint-Gobain Glass
TRW Brake system
Ceekay Daikin/Valeo Clutch sets
Vibracoustic Engine mounts
Visteon Air induction system
ZF Friedrichshafen AG Chassis components, including tie rods
Behr HVAC for the luxury version
Dürr Lean Paint Shop
Alternative-energy engines
54
While the Nano is a driven by a gasoline-powered engine, several more
radical powerplants have been proposed but not put into production.
Compressed-air engine
Tata Motors signed an agreement in 2007 with a French firm, Motor
Development International, to produce a compressed air car Nano While the
vehicle was supposed to be able to travel approximately 200 kilometres (120
mi) on US$3 of electricity to compress the air, Tata's Vice President of
Engineering Systems confirmed in late 2009 that vehicle range continues to
be a problem.
Diesel
A website has speculated that the Nano might be made available with a 690
cc diesel engine by September, 2010. Tata motors have not confirmed this
but have stated, "as of now the diesel variant is not offered. [The Nano] will
be offered only in petrol now.
Electric vehicle
Tata has discussed the possibility of selling an electric version, and while it
showcased an electric vehicle Nano at the 2010 Geneva Motor Show no
such car is currently on the market.
If an EV Nano is sold it's expected to be the "world's cheapest electric

car",use lithium-ion batteries, and have a range of 80 miles (130 km) A
Norwegian electric car specialist, Miljøbil Grenland AS, has been named as
a supposed partner in the project
Effects
The introduction of a cheap, mass market auto such as the Nano is bound to
have some unforeseen effects.
Pollution increase
As the Nano was designed for a population currently using eco-friendly
bicycles and motorcycles, environmentalists are concerned of the increase in
pollution that would follow a mass motorization in developing countries
such as India.
However, the Nano has far lower emissions compared with developed
country autos.
55
Indian used car market
The Nano is thought to have affected the used car market in India, as many
Indians may opt to buy a Nano rather than a used vehicle. The new-car
market is also being affected. Sales of new Maruti 800s, the second-cheapest
car in India, dropped by 20% and used models by 30% prior to the Nano's
introduction.
Awards
2010 Business Standard Motoring Indian car of the year
2010 Bloomberg UTV-Autocar car of the year
2010 Edison Awards, first place in the transportation category
Issues
As of Friday, Aug 27, 2010, six Nanos have caught fire across India; Tata is
investigating.
Tata Nano Review:

Five to ten years back, if one being asked, “From where will the next big
automotive innovation originate?” The answer could have been Japan,
Germany, Italy, US or some other European nation, no one would have dreamt
of India. But as its said nothing is impossible, Tata's strong will and
determination to make the world’s cheapest car has been achieved and the
dream of owning a four wheeler for a common Indian can now be fulfilled.
Nano’ is a good brand name
56
_
Nano is about small being beautiful.
What’s your view of brand name NANO?
- Swapna S. Sampath, Chennai
Swapna, Nano is a lovely brand name. My earliest brand theory revolved

around brand names. I have always said the best brand name should be a four-
letter word.Simple, crisp and to the point. Amul is an example as is Pepe. as is
Tata itself.And now Nano.
I believe there is a hierarchy of good brand names we can build. The first point
is that four-letter words make great brand names. The second point of fineness
on this is that four-letter names with two syllables in them are great. Amul is
actually ‘Am-Ul’. The third point is that such names with two syllables that
repeat one after another are the best, such as Tata or Pepe. The fourth point is
that four-letter names with two syllables that repeat with a slight variation are
good as well, as in Nano. Going by this, I do believe Nano is a great name.
Nano is a great adjective for sure. It is a very relevant word for today, really. It
is a recession-word for sure. It is all about small being beautiful. It is a tech
word as well. Nano packs a lot of punch and the brand name itself, in its
articulation and use, provides for a wide range of applications. The moment
you hear Nano, you think of the car. The car leads the imagery whenever this
word is used in India.
Are Indian companies really prepared to handle a crisis?
- Joshua Reddy, Hyderabad
Josh, most companies are very poorly prepared with the ability to manage and
communicate a crisis. Crisis management is quite like death. Everyone knows it
57
can happen, but no one thinks it can happen to them. This is why most
companies are poorly prepared on this count.
Crisis management in most organisations is outsourced to PR agencies, who

themselves are, most of the time, not very well equipped to communicate a
crisis. There is very little in terms of active drills that are done by companies or
their PR partners. I do believe this is necessary, quite like a fire-drill. A crisis
sure is like a fire.
What started with the collapse of the Lehman Brothers has touched all of us
with pay cuts and job losses and compromises in our lifestyles. Is this cyclical?
Why does it happen at all?
- Hitesh Dalal, Kolkata
Hitesh, what started has not ended as yet. We are somewhere in the middle of it
all. It sure is cyclical. It happens. It is a crisis of a hollow economy getting
hollower still. It is the classic case of Western economies bleeding themselves
to death spurred on by the credit mentality. I do believe it all started with the
credit-seeking mentality of the Westerner at large. In the beginning, the solid
economy believed in gold and money. The US economy counteracted to spur on
demand and credit offers helped businesses sell more. Then came the
formalised retail credit offer of them all – the credit card.
The plastic economy helped boom consumer retail buys. And then this credit
card went from credit for groceries to credit for cars to credit for homes
(mortgages) to credit to banks to credit to loan-swaps amidst banks et al! The
solid economy based on what people “had” morphed into a hollow economy
based on what people “did not have but pretended to have”. The economy had
to collapse. Sub-prime, derivatives and all came crashing down the economy.
This is where India is different. We still do not believe in credit as much as the
Westerner does or did. We are a cash economy. We are largely led by what we
have than by what we aspire to have. Our Eastern philosophy has helped us
greatly. Let’s stay this way.
Banks are going to hate me. A good start would be to stop using your credit
card. A good way would be to manage with what one has rather than what one
does not have but wants to have. A good way would be to pay up your credit
card dues every month as soon as the bill arrives, without availing yourself of
the EMI services. A good way to ward all this off would be to postpone a buy
rather than advance a buy!
58
If there is one Indian brand that needs re-branding desperately, which one
would it be?
- Shaili M. Pinto, Bangalore
Shaili, interesting question. A quick answer that comes up is the Indian Police
Service. I do believe the service does yeoman service to the nation. Despite it
all, its brand image is a wee bit shaken and stirred. It has just not got its act
together for while now.
There is a need to build a vibrant branding programme that puts a benign face
to the service at large, a need to wipe out the scar of corruption that attaches
itself to the service, whenever mentioned. It’s a challenge that is exciting
because of the size of the task and the impact.
59
Cheapest Car In The World
By: Susan Harris
Published: Oct 21, 2010
Cheapest Car In The World
Cheapest car in the world sells for only $2,500 and it's known as the Nano. A
lot is riding on the the world's cheapest car, which is dubbed as an all weather
vehicle. Nano is the cheapest
car ever made and you can't beat the Nano price.
Ratan Tata, chairman of the company behind the upstart econobox, India's
"People's Car" will be a "safe, affordable, all weather vehicle for a family which
is today traveling on a two wheeler." The entry level model is ticketed at just
over $2,500, a revolutionary price where the average lower middle class income
is $200 a month. It could well be one of the most important cars ever designed.
The car emerged at a much-anticipated launch on Thursday: a cute, short thing,

with four doors, tiny wheels placed out at the far corners of the body and what
looked like plenty of room inside. The Nano has just enough space for a
briefcase or small bag under the hood. The engine -- all two cylinders, 624cc
and 33 horsepower of it -- is in the back, just like the Volkswagen Beetle of old.
The speedometer and other instruments are kept in a central pod in the middle
of the dashboard. The car has a top speed of about 60 miles per hour. "Car
companies are in probably the most emotive business area that one can find
60
apart from fashion," Tata said in a statement. The car delivers 50 miles per
gallon, according to the automaker.
Nano-Niche Marketing: Small is the New Big:

There’s an interesting article on MarketingSherp touting the benefits of “nano-
niche” marketing. Just about everyone involved with online marketing is well
aware of the need to market products to well-targeted niches, but this idea takes
things one step further and states that if you really want to stay recession-proof
and get ahead of your competitors, you need to get laser-focused.
Tapping in to a highly motivated audience with little competition, and taking

steps to gear your message towards them, can result in extraordinarily high
returns on your investment. We talk a lot about the Long Tail here at
ClickBank, and this idea is a perfect example of making the Long Tail work for
you. You don’t need to drive a lot of traffic or spend a lot on advertising if you
can achieve much higher conversion rates on the small amount of traffic you do
have.
Nano-niche marketing is a perfect fit for affiliate marketing, since all that
matters is how many visitors you convert into a sale, not your overall number of
visits. Needing to drive huge amounts of untargeted traffic to your site is the old
way of making money online. It used to be the case that using impression-based
ad networks or programs like Google Adsense was the only way to make
money, but that model doesn’t make sense for the vast majority of Internet
marketers out there. In fact, at the recent BlogWorld conference I attended,
these old monetization strategies were referred to several times as “webmaster
welfare,” and the same experts instead recommended affiliate marketing and
creating and selling your own products as the best ways to monetize a blog. The
same holds true for just about any other type of website.
My recommendation is to take MarketingSherpa’s advice and start spending

time identifying and targeting “nano-niches” in your area of expertise. The time
you spend marketing to people in these ultra-focused niches will bring a much
higher return on your efforts, giving you more time and resources to dedicate to
finding other profitable niches. It’s time to think small!
61
CHAPTER 6
Tata’s new marketing strategy for Nano

INTRODUCTION:-
Expecting a situation where the consumers are backing out due to the long
waiting period over the product, the home-grown auto major, Tata Motors has
recently changed its gears as far as the marketing for the product goes.
It is to be mentioned here that close to 50K customers have got their car during
the past one year, but as the small wonder of the company received an
overwhelming response and keeping in mind the production constraints, it has
been facing a situation of huge backlogs on its books.
However, according to the recently announced campaign, the initial drivers of

Nano can now enjoy free 15 day trial drive before buying it. The company is
offering this proposition as an added advantage which even the first slot of
people who had booked the cars could not get.
While the motive is to grab new customers to its fold, it is believed that this free
15 day trial drive may sound a good deed from the customers' point of view.
Analysts are supporting the fact that Tata may pull nearly 7 percent growth in
small car segment by 2012.
62
Marketing Strategy Of Tata Nano
About the TATA MOTORS
Tata Motors is India's largest automobile company, with consolidated revenues

of Rs 92,519 crore ($20 billion) in 2009-10. Through subsidiaries and associate
companies.
Tata Motors is the country's market leader in commercial vehicles and among
the top three in passenger vehicles. It is also the world's fourth largest truck
manufacturer and the second largest bus manufacturer. Tata cars, buses and
trucks are being marketed in several countries in Europe, Africa, the Middle
East, South Asia, South East Asia and South America.
About the TATA NANO
TATA NANO with a tag line of “Peoples Car” its self tells that made for that
people who just Imagine that when will be he/his family having a car??
Shree Ratan Tata came with NANO concept with 1 lakh Rupees dreamed car.
63
Idea Generation
I saw families riding around on scooters with kids standing up and the mother
carrying a baby and sitting pillion and decided to do something about it. It
started as a quest for an affordable transportation solution.
Tata Nano: Specifications
➢ Looks: The snub-nosed car keeps in the tradition of the Fiat 500, Nissan
Micra and the Smart.
➢ Dimensions: 3.1 meters (10.23 feet) long, 1.5 meters wide and 1.6 meters
high. Can seat four to five people
➢ Engine: A two cylinder 623 cc, 35 horsepower rear mounted, all

aluminum, multi-point fuel injection petrol engine can power the car to top
speeds of 105 kilometers per hour (65 miles per hour).
➢ Fuel Efficiency: 20 kilometers per liter, or 50 miles per gallon is claimed.
➢ Pollution: Exceeds Indian regulatory requirements and can meet strict

Euro IV emission standards. In terms of overall pollutants, Tata says the car is
better than two-wheelers manufactured in India currently
➢ Safety: Car exceeds current regulatory requirements with a strong

passenger compartment, crumple zones, intrusion resistant doors, seat belts,
strong seats and anchorage.
➢ Nearest Domestic Car Rival:.
64
Marketing Segmentation Of Tata Nano In India And Its
Targeting And Positioning Strategy.
Market Segmentation, Positioning, Targeting: A case of Tata Nano in India
Targeting and positioning strategy of Tata Nano and recommendations for the
company are given.
According to Howard and Sheth (1969, p. 70), “market segmentation depends

on the idea that the company should segment or divide the market in such a way
as to achieve sets of buyers”
Historically sellers were engaged in mass marketing. They were into the mass
production, mass promotion and mass distribution of one product to all
consumers in order to obtain economies of scale. This approach of marketing
segmentation made the producers to compete against their competitors in terms
of products and services. Kotler says “the product differentiation is to provide
variety to the buyers rather than to appeal to different segments”.
DISCUSSION:
CRITICISM OF MARKETING SEGMENTATION:
When the size of the market is so small to do marketing
When a brand is a dominant brand in the market.
When more number of people falls in the same category.
Most of the brands do not operate within the same segment. Certain brands
cannot fit into a particular segment which is a drawback to this strategy. In very
small businesses and brands this strategy will not work and it is not possible.
65
CASE OF TATA NANO IN INDIA AND ITS

MARKET SEGMENTATION:
Tata Motors is the leading automobile manufacturer in India with a huge
portfolio which includes trucks, passenger cars, buses, and utility vehicles. Even
though there are many products from Tata Motors an interesting case of Tata
Nano is discussed further. Generally Tata Motors follow the marketing
segmentation concept and they have succeeded which already prevails in the
history.
Tata Nano which comes under the passenger car segment was launched in
January 2008. India’s passenger car segment has been grown..
Marketing Mix Of Tata Nano
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
automobile company in India. It’s Chairman, Mr Ratan Tata envisions that Tata
Nano to become
a “People’s car“which is affordable by almost everybody. Tata Nano was first

launched in India on 1st 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 millage than Toyota Prius and same gas emission
as a scooter.
66
Tata Nano
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
Marketing Strategy For A Competitor To Counter The Nano Juggernaut
The unveiling of the Tata Nano, the one lakh car at the world auto expo has
created quite a flutter.
Tata is going to launch the 1 lakh car in September. The Tata with their rich
heritage are known for keeping promises and a quality product is expected from
them. This has posed quite a threat to various segments of the industry.
The high priced cars that fall in the large car segment have the image of
premium cars and are largely unaffected by this. However, the small and
medium segment cars, which were previously among the lowest priced cars in
the market, do have a lot to worry about. The same is the case with the two
wheeler industry where the premium bikes will be unaffected with this entry as
will the lowest priced bikes. However, the buyers of medium priced bikes will
surely be tempted to switch to the Nano. Also threatened will be the auto
rickshaw industry, being priced more than the Nano.
The other car manufacturers, instead of trying to compete with
Is this Essay helpful? Join OPPapers to read more and access more than
325,000 just like it!
get better grades
the Nano should try to maintain the distance from it. With the entry of a lower
priced car, these cars should focus on the prestige aspect and emotional appeal.
67
This can be done through innovative offerings. The advertising strategy should
also be changed to reflect this.
The motorcycle/scooter manufacturers will have to make the

motorcycle/scooter a vehicle of choice. This can be done by targeting the
college going crowd and the young workforce. The advertising should focus on
aspects like convenience, maneuverability and fuel efficiency.
The auto rickshaw manufacturers will have to redesign it to reduce price,

running costs and to provide a cozier and cab-like experience.
King Customer:
Middle class: With growing economy, the middle class in India is growing in
terms of numbers as well as purchasing power. This is evident from the
increased in number of two wheeler sold in recent year. But type of increase in
number is not witnessed in case of cars.
Research On Tata Nano
IILM Institute for Higher Education
School of Business
TASK INVOLVED
 Discussion with decision maker  Interviews with experts  Secondary

data analysis
As our project is on Tata Nano and we were not able to make our approach to
discuss with the decision maker, interviewing with industry expert, and
secondary data analysis. Since Nano is only pre-launched and the final launch
will take place in September 2008, and as this is the new segment created by
Tata’s so there was no secondary data available.
68
 Qualitative research
In qualitative research we performed focus group in which we took a sample of

10respondents. Who had a previous driving experience, driving licence,
knowledge about Nano, and were from different cultures, regions, and of age
group between 20-25yr. We made them aware about the topic, and collected
their views about Nano.
ENVIRONMENTAL CONTEXT OF THE PROBLEM
PAST INFORMATION AND FORECAST
Tata
Is this Essay helpful? Join OPPapers to read more and access more than
325,000 just like it!
get better grades
is one of the oldest companies fighting to establish its position in small car
segment.
RESOURCES AND CONSTRAINTS
Tata has wide resources in terms of infrastructure and money. But the rising
price of steel in the world market is major concern.
OBJECTIVE
Tata want to become no: 1 in automobile industry (both small and large) and
want to provide everyone with an affordable car of their dream.
BUYER BEHAVIOUR
In India the market for four wheeler is huge. Demographic feature is also
favourable for India
LEGAL ENVIRONMENT
With the increase in volume of traffic there will be pollution problems and also
will increase the accidents.
69
ECONOMIC ENVIRONMENT
As the GDP of India is rising the living standard of consumers is also rising and
now their purchasing power is also increasing. So there is more disposable
income.
MARKETING AND TECHNOLOGICAL SKILLS
Tata has expertise in marketing and technology. Bosch developed 623.6cc multi
point fuel injection system engine...
So now that world's cheapest car Tata Nano has been launched its time for
marketing's role to come in play. How will Tata sell the car what should be the
tagline and what should be the positioning. Mint went to some of the ad
industry experts and they came out with a lot of different takes on this with
ideas ranging from
Positioning
“Small car for people with big dreams”.
"the intelligent machine"
"People’s Car" and my own personal favourite
"Less is More" Minimal use of resources for maximum living.
Tagline
Chhoti Car, Badhe Sapne (little car, big dreams).
The Smart Car
Azadi Ki Dusri Lehar (second wave of freedom).
70
Get a Tata Nano in Exchange for a Two-Wheeler
Tata Motors has launched a new offer to boost sales of its ultra-cheap car Tata
Nano. Now two-wheeler owners can walk into any Tata Motors showroom to
exchange their two-wheeler for a car. “2 wheels for 4” scheme has not only
raised customers interest in Indian market but has also boosted sales for the
company since Nov 04.
"If you want Nano through our exchange offer, just go to any Tata Motors
dealer and get your dream car on an attractive EMI," said Vishal Vashishta, a
company manager. For the exchange offer, the company has tied up with the
State Bank of India (SBI) to provide hassle-free loans offering EMIs as low as
Rs 1960, Vashishta said. For increasing the market share, the company is also
opening up new Nano access points for test drives in order to attract more
people. Besides, Tata Motors has also tied up with 25 banks across the country
to offer loans.
Moreover, Tata Motors has also tied up with twenty five banks all over the
country to provide loans to its customers. In the meanwhile, the company has
begun its campaigns for Nano concentrating on tier II and III cities and also on
the rural areas. Recently the company has also put forth a solution in the form
of ‘Tata Towers” project to provide a solution to the on-road congestion.
71
CHAPTER 7
Tata Motors Puts the Pedal to the Metal in India’s Car

Market
by Tony D’Altorio, Investment U Research
Friday, August 20, 2010
Many investors know that as of this year, China has the world’s largest car
market. But too many have no clue about India’s fast-paced automotive sales.
Sales there have been driven sharply higher by several factors, all leading to one
impressive final result.
The Society of Indian Automobile Manufacturers (SIAM) reported that

passenger car sales hit a record high last month at 158,764, rising by 38% year-
on-year.
That growing demand actually contrasts with China, where July sales rose at
their slowest pace in 15 months.
Of course though, India didn’t put the brakes on its economy in the same way…
far from it.
India’s Car Market – A Car-Manufacturing Hub
Global carmakers are increasingly viewing India as a small car-manufacturing

hub.
Toyota ADR (NYSE: TM), Nissan ADR (OTC: NSANY), Ford (NYSE: F)
and Volkswagen ADR (OTC: VLKAY) are all releasing new models there
these days.
That ramp-up has corresponded with India’s recovering economy and revival of
credit.
Just 18 months ago, many private sector financials had withdrawn from the car
market altogether. But now, they’re opening their doors to auto loans again.
That has led to growing competition for customers with state-owned banks. And
that, in turn, had improved the pricing and availability of auto loans.
72
Most cars sold in India are small cars or the so-called B segment. Darius Lam,
an auto analyst at JD Power, comments, “There are a lot of new models in the B
segment, like Volkswagen’s Polo, Nissan’s new Micra, and Ford’s Figo and it
has really given a big boost to the [sales] numbers in the first six months of this
year.”
India’s car market is also braced for another change, with Tata Motors ADR
(NYSE: TTM) stepping into high gear…
India’s Very Own Tata Motors

Tata Motors holds 61% of the country’s truck market and produces the third
most passenger vehicles.
Over the last five years, it has also grown annual revenue by an average 25%.
This year’s second quarter came in particularly strong though with a 64%
increase.
During the quarter, Tata sold 181,708 vehicles, up 48% from the year before. Its
biggest business, medium and heavy-duty trucks, saw a 62.4% increase in sales
year-on-year.
Those better-than-forecast figures came partially from strong domestic sales.

But surprisingly, its luxury Jaguar and Land Rover brands also took off in
emerging markets such as China, where they grew by 104%.
Tata has really turned both brands around since buying them in June ’08. While
Ford never could turn a dime on either in the fifteen years it held them, they
have now produced three straight profitable quarters for Tata.
73
Tata’s Nano Paves A Clear Road Ahead
Also to its credit is the world’s lowest-priced car, the Nano. Tata started
producing it in July 2009 after receiving orders for over 200,000 of the vehicles
in just three months.
Demand from earlier this year came in so strong that it opened its Gujarat plant
specifically to produce the tiny car. The plant will have an annual capacity of
250,000 cars a year to start and 350,000 if necessary.
Better yet, Sugato Sen, senior director at SIAM, sees a clear road ahead for
Tata. Partially, he bases that on India’s ambitious highway infrastructure plan,
set to finish by 2015.
“30% growth might not always be possible,” he clarifies on the larger industry,
“but the environment is positive and demand is high.”
Tata Motors can attest to that environment, already poised for further gains.
And its stock reflects all of that, hitting its highest level in over 20 years on its
Indian index.
In fact, since hitting a low of 126 rupees in February 2009, it has risen seven
fold. Yet here in the U.S., its ADR – while performing similarly – is still dirt-
cheap with a forward PE ration of 8!
And unlike American car companies, Tata pays a dividend. In fact, during its 54
years as a publicly traded company, it has paid out in all but two. Currently, its
ADR yields about 2.3%.
Tata’s latest results have cemented its recovery from the depths of the economic
crisis last year, much less its debt worries from purchasing Jaguar and Land
Rover.
All in all, it looks like Tata Motors has turned a corner onto a new, very
profitable road.
74
Tata Motors & The Nano: Why “That Little Car in India” Is
Loaded With Big Profits
by Jeannette Di Louie, Investment U Research
Thursday, February 25, 2010
Open up your web browser and go to Google.
Punch in “that little car in India.”
What you’ll see is a long list of stories about the Nano – a car manufactured by
Indian automaker, Tata Motors (NYSE: TTM). When the company first
launched it back in 2008, it generated a significant buzz.
That buzz increased to a roar when the car hit the market last year. And it’s easy
to see why…
 The ultra-compact car is just 10 feet long and five feet wide – perfect for
city-dwellers who need to find tight street parking.
 Because Tata specifically designed the Nano with families in mind, it still
has 20% more room than the smallest car on the market and four people
can fit in comfortably.
 Despite its small size, the Nano still possesses a four-speed gearbox.
 It squeezes out 50 miles per gallon in the city and 70 mpg on the highway
– a boon for both the environment and cash-conscious consumers.
 It retails in India for the equivalent of just $2,500.
American consumers will have to wait another few years before the Nano
comes Stateside, as the company makes modifications to the construction and
price.
But just because you can’t buy the car at the moment doesn’t means you can’t
buy shares of Tata Motors…
75
Tata Motors’ Vision: Go Small

Like many other publicly traded companies, Tata Motors’ shares fell during
2008 and didn’t stop until the market hits its lows in March 2009.
But with strong support in the high teens/low twenties, investors pounced on the
chance to buy back into the stock.
Tata shares hit a high of $18.03 on January 4. And while the stock has shed a
few dollars since – a victim of the vacillating markets – it has the potential to
turn back towards that high – and perhaps beyond. Here’s why…
Tata’s strategic vision right now is to “go small” – but with cars like its Nano
and also it’s business goals.
Not only did the company specifically design the Nano to meet India’s
transportation problems, it’s also pushing the bulk of its products at home and
in other emerging markets, rather than the developed world.
That means it doesn’t have to worry too much about how the West seesaws
back and forth between “stronger economic growth” and a “weaker than
expected” performance.
It’s working, too. Third quarter results showed a 5% rise in vehicle sales over
the previous quarter and a 67% jump from the corresponding quarter a year
earlier. And earlier this month, Tata reported that total sales, including exports,
grew 77% in January year-over-year.
CFO C. Ramakrishnan attributed that growth directly to “the underlying Indian

economic performance, as well as the result of many other price actions that
the company has undertaken in the last year or so.”
And that looks set to continue – particularly within India itself…
76
Tata Motors Has Home Court Advantage

While the financial media likes to focus most of its emerging market attention
on China, India’s consumers may actually have more opportunity to spend their
money on discretionary purchases than its Asian neighbors.
While both countries have burgeoning middle class populations, according to

BusinessWeek…
“While the nation [India] badly needs infrastructure, its consumers are in a far
better position to spend. India can now boast an overwhelmingly independent
middle class about 300 million strong, versus China’s 100 million to 200
million, depending on the parameters. Profits from India’s businesses, large and
small, go into Indian pockets rather than the state’s.”
Recent figures bear this out, too. Despite many poor roads, Indian car sales
jumped by 61% in November and another 40% in December. And as of the last
quarter, Tata had close to a 65% share of the commercial vehicle market.
It’s on the prowl for more growth, too, having recently bid $75.8 million for an
Indian Army vehicle contract. So before the stock approaches its January high
again, now is the time to consider an investment in Tata.
77
Tata Motors Ltd. (NYSE: TTM) – King of the Road

by Investment U Research Team
Monday, December 7, 2009
We all know that most car manufacturers worldwide have suffered dearly. But
while others continue to struggle, one company is emerging from the global
recession by catering to one of the fastest growing democracies in the world.
It’s all taking place in India at Tata Motors Ltd. (NYSE: TTM).
Take a look at the company’s share price since March and you can see that the
market is very impressed with the company’s ability to recover from a crippling
recession in the auto manufacturing sector. From a low of $3.05 on March 2,
2009, it surged back to a 52-week high of $16.01 on December 1 amid strong
retail sales and its green initiatives. But Tata has a lot more left in the tank, as
its primary market races further ahead. And its share price can only reap the
benefits…
India’s Massive Transportation Boom

Consider this statistic: The United States currently has 765 vehicles for every
1,000 people, while India only has 12 for every 1,000.
But expect it to start bridging that gap… quickly.
According to Goldman Sachs’ updated BRIC (Brazil, Russia, India, China)

report, India should have the most number of cars in the world by 2050 – a total
of 611 million.
In the shorter-term, India should have one-third the amount of cars that China
has before 2025. And given another 25 years, analysts believe it will top its
Asian neighbor, with 382 cars for every 1,000 people versus China’s 363.
With those kinds of figures, it means that India will purchase one out of every
six cars sold on the global market – an impressive feat to say the least.
It makes sense, though, considering how the country sped out of the global
recession, thanks to heightened retail demand from its growing middle class
And Tata Motors has clearly reaped the benefits of that growth…
78
Seeing Green and Going Green

In November 2008, Tata sold 32,696 vehicles. This November, that number
soared by 65% to 54,108, in part due to inventive models like the Nano, the
world’s cheapest car at about $2,500.
Analysts caution that maintaining that kind of momentum depends on a

sustained national recovery. But as long as that happens, Tata Motors should
experience strong sales growth as the domestic transportation infrastructure
develops.
The company is also forging ahead with its green initiatives. For example, it’s
using the latest technology to construct a new hybrid bus that runs on diesel at
high speeds, but becomes battery-operated within the confines of a city.
That important, given that global carbon emissions rose 2% last year, due in
large part to increased activity from developing nations like China and India.
And while the latter hasn’t enforced any standards concerning that issue, Tata
Motors has.
While the upcoming bus model currently costs twice as much as a conventional
bus, due to the cost of importing special motors, if Western leaders have their
way on global CO2 regulations, that hybrid bus could become the next big
thing.
However, even if that doesn’t happen, Tata is still managing to do a good job
balancing its forward thinking and out-of-the-box concepts with India’s fast-
paced development.
As demand for cars increases in India, Tata’s share price should grow. So get in
now while it’s still at a devalued level.
79
Tata Motors planning To Launch New Small Car

October 12th, 2010
After the launch of first Indian four-wheel drive crossover, new Tata Aria now
Tata Motors makes another announcement of launch a new small car,to take on
Alto. New small car will be positioned between the Nano and the Indica.”This
is a widespace that needs to be addressed,” said Carl Peter Forster at the launch
of Aria. The new car is expected to launch by early 2012 and powered by an
800cc engine and it compete with the Maruti-Suzuki Alto, which is currently
the largest selling hatchback in the Indian market.
“It will be a completely indigenised product made by Tata Motors and work on
the car is currently underway. Vendors have been approached for specific
components for the new car ,” said this person who did not wish to be named.
Currently the Tata Motors car portfolio includes the Nano, Indica, Indigo,
Manza, Sumo, Safari and the Aria. The New Aria launched yesterday and
Priced at Rs 13.18 lakh-Rs 15.85 lakh(ex-showroom Mumbai).New Aria
Toyota Innova and the Mahindra Xylo
80
Case study
Fire case: Nano owner demands Rs 15 lakh as damages
Mumbai Just at a time the flame seemed to have been doused, there are signs of
fresh smoke. Mumbai's Satish Sawant, whose brand new Nano car caught fire in
March, has demanded Rs15 lakh as compensation from Tata Motors for “mental
stress and trauma” the incident caused for him and his family. In a legal notice
dated June 8 to Tata Motors, Sawant has also threatened legal actions in case
the auto major fails to act within two weeks from the issue date of the letter.
Sawant’s Nano caught fire on the Eastern Express Highway just one-and-a-half
hours after the delivery. The owner was later told by Tata Motors that he had
been given a “pre-production or demo” car. Sawant spent Rs 2.4 lakh for the
car.
“If you (Tata Motors) fail to act upon within a period of two weeks from the
date of this letter, we will be free to take the appropriate course of action or
approach the appropriate authority for the same,” reads the notice Sawant sent
to the company.
Though the deadline has been passed, Tata Motors is yet to act. Its
spokesperson told FE in an email response, “The company has received a legal
notice from Sawant, and is in the process of replying it. Sawant has already
received the full refund for the Nano he purchased, along with the accessories,
and even the interest on the loan he had taken to make the purchase, in
settlement of all his claims. As far as Tata Motors is concerned, this is final.”
Archana Sabnis, the advocate handling the case on behalf of Sawant, told FF,
“Tata Motors has not contacted us after the notice was sent, and therefore, we
will be moving ahead to file a case with the district consumer forum at Parel in
Mumbai.” FE has reviewed the notice Sabnis sent to Tata Motors on behalf of
Sawant, and it reads, “It is great on your part to offer a refund to my client,
which my client had accepted only on oral assurance from your side to pay him
a compensation; and which you are duty bound to pay. I thus call upon you to
pay Rs 15 lakh to my client towards the compensation.”
81
This certainly isn’t the way Tata would have liked to celebrate the first birthday
of the Nano.
The company is now in the process of investigating the possible causes behind
the Tata Nano which went up in flames yesterday in Mumbai, minutes after it
was delivered to its customer in Prabhadevi, Mumbai.
Spokesperson for Tata Motors -
This is a unique case. We are trying to figure out what went wrong.
Over the last one year three other cases of Nanos going up in flames have been
reported. All the three cars were parked when the incident happened.
Tata Motors announced the problems with the static cars catching fire were due
to a faulty switch placed near the steering wheel. The company stopped
sourcing that faulty component from the vendor and performed checks to
vehicles on the road.
Tata Motors has offered to return the money to Mr Satish Sawant, the insurance
agent who cheated death yesterday when the car he was driven in by the
company driver suddenly burst into flames, barely 45 mins into the drive.
The exact cause of the fire is still being investigated and it remains to be seen if
Tata will deploy one more round of checks before cars are delivered to
customers
82
Conclusion
83
Bibliography
84

Project On Small Car Marketing-Nano

Uploaded by

Copyright:

Available Formats

Project On Small Car Marketing-Nano

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Project On Small Car Marketing-Nano

Uploaded by

Copyright:

Available Formats

Small Car Marketing-Nano

A main objective of marketing is to create customer value.

Marketing usually involves an exchange between buyers and sellers or between

Marketing frequently involves enduring relationships between buyers, sellers,

Processes involved include “creating, communicating, delivering, and

Sources of influence on the consumer. The consumer faces numerous

Consumer Choice and Decision Making: Problem Recognition. One model

Consumer involvement will tend to vary dramatically depending on the type of

It is important to consider the consumer’s motivation for buying products. To

Consumer Research Methods:

Market research is often needed to ensure that we produce what customers

Primary vs. secondary research methods. There are two main

According to Edward L. Bernays, “public relation is the attempt by information,

5)Word of Mouth Marketing:-

In my view, the most important aspect of radio marketing is no longer

Of course, the trick to using radio as a significant part of a marketing campaign

Marketing Tools for Marketing Planning

Segmentation involves finding out what kinds of consumers with different

Generically, there are three approaches to marketing. In the undifferentiated

Positioning involves implementing our targeting. For example, Apple

To effectively attempt repositioning, it is important to understand how one’s

Primary vs. secondary research. There are two kinds of market

Secondary sources. A number of secondary sources of country information

A Scotsman, Robert Anderson, was the first to invent an electric carriage

According the History of Automobile Industry US, dominated the automobile

Automobile Industry Introduction:-

Estimates of the worldwide automobile market vary substantially from one

As widely expected, GM filed for bankruptcy in mid-2009, and was promptly

are approximately 250 million vehicles in operation in the United States.

consumers and emissions regulators are taking a renewed interest in advanced

The rising affluence of consumers in China is creating both huge opportunities

to be overlooked are the vast changes taking place in automobile manufacturing

Progressive Insurance Automotive X PRIZE offered $10 million in prizes to the

Celebrity endorsements and testimonial advertisements have come a long way

Top 10 Small Cars in India Under 5 Lakhs

2) Chevrolet Aveo U-VA

The price starts at Rs 3,41,000 (ex-showroom Mumbai).

4) Tata Indica Vista

5) Maruti Suzuki A-star

6) Hyundai Getz Prime

The new premium hatchback, Getz Prime, is the inimitable fusion of

The prices start at Rs 3,80,000 (ex-showroom Mumbai).

7) Fiat Palio Stile

Prices range approximately from Rs.3,35,000- Rs.4,70,000 (ex. showroom

8) Maruti Suzuki Zen Estilo

Prices start at approximately Rs.3,02,000 (Ex-showroom Mumbai).

The starting price tag is from Rs.3,25,000 (ex-showroom Mumbai).

year aged period. Earlier in

Rendering – Hyundai H800 small car for India:

After hours of observations and estimations, we passed on our thougths to our

Tata motors may roll out 800cc small car by 2012

At concept stage, vehicle to fill Nano-Indica gap.Recognising the need for a

The most significant change is the movement of the two-wheeler buyers

India's small car market drives the global biggies

BATTLE FOR INDIA’S SMALL CAR MARKET

International auto manufactures, including Toyota, Honda, Volkswagen and

Maruti-Suzuki, the Indo-Japanese producer, holds 55 per cent of the market

The Japanese manufacturer's plan is to export the car from India.