Nano economics

imagine the math in the brains of the manufacturers behind the scenario of Nano. It wasn’t a tough time when Nano was first introduced, but Mamata -farmer and land politics made it a diffcult scenario, Tata Nano was predicted to be launched later.

later, markets tumbled after the Lehman Bros share sank and so followed the world economies. But the economics behind nano is still the same.

Go for quantity. Thats it. Its like when we have to sell a 200$ product to 10 people and have a sale of 2000$ and inturn a profit of XYZ percentage. Imagine, things like marketing the product and sales getting tougher and the common man not interested in this costly and expensive, classy 200$ product.

turn in to a proportion in accordance to its value and make it available to a public numbering to 10 X (times) for the getting above sales figures. So the above equation changes – 20$ * 100 again the same results can be achieved. Nano is just bering the same fruits of above calculations.

The manufacturers have just done that be it Auto or mobile telecommunications. The market size of the country with “2nd highest population” says it all, with a percentage less than a few 3-4 % being able to purchase a car and in that half of them being able to drive by their cars daily!

The mobile and equipent market is also yet to boom.

Then, it has presented a tough competition to the already prosperous 2 wheeler market in India by Hero Honda, Bajaj, Yamaha, TVS (new entrants Honda & Suzuki), who were earlier riding on their success of “sold in Crores” motorbikes which earlier were with 100 cc engine, now the craze of 150+ cc bikes have evolved during the last 2-3 years ( Bajaj Pulsar 150, 180,200,220 cc, Hero Honda- Karizma 230+cc, Honda unicorn, Yamaha sports bikes (recent additions), TVS apache, to name a few).

Reva, its also a small electric car, hasn’t been able to acquire the publicity and fame Nano has got.

Second is, Nano’s price in comparison to the other Hatchback models, is too low for the base model. and the AC version nears Maruti Suzuki’s basic models.

Third, other manufacturers have also decided to enter into the same category, including Bajaj Auto (they had also shown their Nano-sized vehicle in the Auto shows, launching next year). A Toyota car article was on MSN (here) yesterday under :  Japanese rival for Tata Nano .


iq from Toyota

(click to enlarge)

Its just wait and watch at the moment, as Nano bookings start today!

DNA has reviewed it & the review can be read here


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