Section 37

What went wrong with the Tata Nano

Why did a car built to be the most affordable in the world fail to sell?

01
The situation
Tata Motors introduced the Nano in 2008 as an affordable car for India's middle class, targeted at a price of Rs 1 lakh. Its first plant was being built at Singur in West Bengal, where the state government had acquired land in 2006.
02
The decision
After months of protests over the land at Singur, Tata Motors withdrew from the site in October 2008 and on 7 October 2008 announced it would build the plant at Sanand in Gujarat. The car was marketed heavily on its low price.
03
The outcome
About 3 lakh Nanos were sold in total, roughly 70 per cent in the first three to four years, against a Sanand capacity of 2.5 lakh cars a year, DW reported. In June 2018 Tata Motors said it made just one Nano and sold three. Analysts quoted by DW pointed to the 'cheap car' image in a market where a car signals status. In August 2016 the Supreme Court quashed the 2006 Singur land acquisition, and in 2023 Tata Motors announced an arbitral award of Rs 766 crore plus interest for its Singur investment.

Sources (4)

The situation