Tato Nano and Smart Cars

Tato Nano and SMART cars:

June 19, 2017

Abstract

Tata Nano and SMART cars were automobiles ahead of their times.  Each born from a vision of building a vehicle that would disrupt the auto industry, they focused on the increasing need for compact mini-cars in their respective marketplaces. The Tata focused on the basic necessities and affordability while the SMART emphasized style and safety.  With significantly different target audiences, each developed a marketing mix they felt would be most attractive to their core consumers.  Even though both vehicles started off with a strong launch, sales quickly dwindled as the automakers struggled with identifying the appropriate marketing strategy to meet their business objectives.  From advertising and messaging to safety and quality concerns, each company was plagued with issues that impacted their overall brand image. Significant steps were taken to address these concerns and focus marketing efforts on repositioning the brand to consumers.  However, especially in the case of the Tata Nano, these efforts did not work.  Sales continued to decline significantly up to today, with rumors that production of the Nano will soon stop.  For SMART, an expansion into the US market in 2008 appeared promising, but the company has continued to face dwindling sales.  Daimler, owner of SMART, recently announced a shift in its product strategy in the US and Canada and will only be only selling electric-powered SMART vehicles.  This appears to be a result of a growing trend towards electric vehicles in North America over the last few years.  Ultimately, the success of each vehicle now depends on its ability to develop a compelling marketing mix and value proposition that appeals to consumers.  Only time will tell whether Tata Nano and SMART can overcome its current challenges and maintain a market presence in the foreseeable future.

Tato Nano and SMART cars:

The Tata Nano and SMART cars are considered “mini-cars” also known as A-Segment vehicles.  Initially, mini-cars were defined as cars that were less than 10 feet long and engine size less than 1000 cubic centimeters (Radler, 2002).   These cars are extremely popular urban areas and cities, especially in Europe and Japan.

Overview of SMART cars and Tata Nano

SMART cars made its debut in 1998 after a joint venture between Mercedes-Benz, owned by DaimlerChrysler, and Swatch.  Swatch was looking to disrupt the auto industry with an innovative new car, similar to what it had done with watches, while Mercedes-Benz was looking for a new vehicle segment that would offer it volume, growth, and profitability.  Market research was showing promising statistics on the mini-car segment and expected it to grow 38.5% between 1998 and 2004 (Radler, 2002).  Prior to its launch, however, Mercedes-Benz bought out Swatch’s shares, assuming control of the entire company.  Swatch continued to stay involved in the car design and marketing launch strategy.