Essay on Tata Nano: international market selection with the world’s cheapest car

Words: 1003
Pages: 5

The majority of growth in the global automobile indus- try in the coming decade will come from emerging economies such as India, China and Eastern Europe, and the largest contribution to growth of auto markets in these countries will be the fast-growing small car segment. The increasing disposable income of the middle-class population is the key driver of small car markets in developing nations. However, in developed regions like the US and western Europe, stringent environmental standards are increasing the need for more fuel-efficient cars.
Tata Motors
Indian conglomerate Tata Group ( employs nearly 300,000 people in 85 countries and is India’s largest conglomerate company, with revenues in 2006–07 equivalent to US$28
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Rather it set US$2,500 as the price that it thought customers could pay and then worked back, with the help of partners willing to take on a challenge, to build a US$2,500 car that would reward all involved with a small profit.
The Nano engineers and partners didn’t simply strip features out of an existing car – the tack Renault took with its Dacia Logan, which sells in India for roughly US$10,000. Instead, they looked at their target customers’ lives for cost-cutting ideas. So, for instance, the Nano has a smaller engine than other cars because more horsepower would be wasted in India’s jam-packed cities, where the average speed is 10 to 20 miles per hour.
The Nano aims to bring the joys of motoring to millions of Indians, doing for the subcontinent what the Volkswagen Beetle did for Germany and the Mini for Britain. But the plan has horrified environ- mentalists who fear that the demand from India’s aspirational and increasingly middle-class population – now numbering 50 million in a country with a total 1.1 billion people – for more cars will add to pollution and global warming.
The global automotive industry and the current crises
In 2007, a total of 71.9 million new automobiles were sold worldwide: 22.9 million in Europe, 21.4 million in Asia-Pacific, 19.4 million in USA and Canada, 4.4 million in Latin