The Tata Nano: When The People Rejected a People’s Car

Picture the scene.

It’s 2008. The world is on the verge of a financial collapse. Fidel Castro has stepped down as the President of Cuba due to his failing health. The Large Hadron Collider has been powered on for the first time and is about to make huge leaps in the world of particle physics. Barack Obama has become the first African-American president of the United States.

It’s a pretty big year. Big enough, perhaps, to launch something that should change the car market forever? Well, Tata definitely thought so, because this was the year the Indian mega manufacturer unveiled the Tata Nano to the world.

Tata was feeling pretty confident with the Nano. It launched the Tata Ace mini-truck in 2005 to create a rival to the three-wheeled mini trucks made by companies like Piaggio and Mahindra. Priced at 225,000 – 335,000 Rupees (around £2400 – £3600/$3150 – $4800), it was a cheap way of converting 3 wheeled truck users onto a four-wheeled platform. Clearly, the Ace was a pretty successful idea, as the truck is
still in production!

With the small truck segment cornered by Tata, they decided to apply that logic of converting people to four-wheeled transport at a low cost into the car world. You see, the Nano wasn’t designed for car owners. Not really, anyway. The Nano was designed for people who would otherwise take their family around on a motorbike.

Motorbikes, as any of you who either ride them or know who people who ride them will know, tend to be a fair bit cheaper to purchase than cars. If the Nano was supposed to be an option for those who would otherwise only be able to buy motorbikes, they needed to make it cheap. Really cheap. As cheap as they possibly could, whilst still having all the things it needed to be a proper car. As a result, Tata did some really serious cost-cutting.

What kind of cost-cutting?

The kind of cost-cutting that even the stingiest of your miserly relatives would recoil in horror at. The kind of cost-cutting that even people from the broken biscuits and the middle isle of Lidl brigade wouldn’t even touch. “Is it really that crazy?” I hear you ask. Yes. Yes it is.

The Nano’s body was made of very thin, flimsy steel because it was cheap to manufacture. The earliest versions didn’t even have an opening rear window, let alone a full hatchback, meaning that if you wanted to put any luggage in the boot area you would need to fold the rear seats down. It only had one windscreen wiper instead of two. Each wheel only had 3 lug nuts instead of 4. Early models only had a wing mirror on the driver’s side. Base models had no power steering, no power windows, no radio or CD player, no air conditioning and no heater. No versions of the Nano came with any airbags.

One of the most hilarious examples of cost-cutting on the Nano was to do with how you put fuel into the car. Tata deemed a fuel filler cap to be too expensive, so to refuel the car the bonnet had to be opened and fuel had to be poured into an inlet inside that space. This is something that might be more familiar to Trabant owners than those of a modern car from the late 00s!

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

So what was the total result of all this cost-cutting? A car that Tata could bring to market in India at the bargain price of 1 Lakh (100,000 Rupees). That’s equivalent to around $2000 at the time. This made it the cheapest new car on sale anywhere in the world. It makes the price of the base model Dacia Sandero seem opulent and extravagant.

But, this is the most important part of the car. It was cheap enough to tempt Indian motorists away from their motorbikes and into the world of car ownership. It’s not really competing against other cars. It’s competing against a whole different type of road vehicle entirely.

The launch that went wrong

So, the Tata Nano was unleashed upon the world in all its cheapness. Things seemed positive at first. It seemed like the Nano might do for motorbike owners what the Ace did for 3-wheeled light truck operators and convert them to 4 wheels. People even hailed the Nano as a people’s car. A car that would finally get India on four wheels en masse. But, as we all know by this point, that was not to be the case. The Nano ended up being a failure.

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

There’s also the matter that in countries that are rapidly developing and growing into global economic players such as India and China, owning a car is considered to be a symbol of social and economic progression. If you couldn’t afford to have a car previously and now you’re able to buy one, that’s a signpost that you’ve climbed a rung up on the social ladder. When this is taken into account, the Nano is a double-edged sword.

Consider a point from the YouTuber Aging Wheels, who has done a video on the Nano. He made a comment that if you could only afford the cheapest car on sale, doesn’t that send a visible signal that you’re poor?

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

A moral problem?

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

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

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

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