The Art of Designing New Market

Tata unveils Rs-1 lakh People’s Car ‘Nano’

Tata Motors’ drive to produce a cheap, no-nonsense, small car was born from close observation of a local market where millions often ferry families of four, plus baggage, on motorbikes and scooters.

Nano will have a 30-litre fuel tank and four-speed manual gearshift. The car will come with air conditioning, but will have no power steering. The car comes with front disk and rear drum brakes. The company claims mileage of 20 kmpl in city and 26 kmpl on highway.

Following are some of the pros and cons:

·         There will be a huge demand because of lower price targeted to the middle class segment.

·         It will increase the thickness of automotive arena in that segment.

·         It will induce network externality tipping the ratio from bikes to cars.

·         It will increase the oil demand and consumption as the mileage of cars is far lower compared to that of bikes.

·         It may result in congestion.

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