After the stormy protest by some of the farmers in Singur in West Bengal, Tata Motors was forced to find

a new manufacturing destination for the Nano By the time the factory was ready, the project had been delayed by 16 months

Telang says that because of the Singur episode, the momentum was lost The hype that had been built up around the product backfired on the company because it was simply unable to meet the initial demand

Until it could get the factory ready, Tata Motors kept sending back buyers It accepted 100,000 bookings initially, and then stopped the process until supplies could be stabilised taking money and keeping people waiting endlessly for the cars would have upset customers

The perception of fragility was reinforced by the news of Nanos catching fire while on road Of the initial 100,000 bookings, 30,000 buyers cancelled, with most cancellations coming after the fires

initial lot of buyers for the car turned out to be a completely different set of people from the ones the company had banked on the initial lot of Nanos were booked almost entirely by people who already owned cars The first-time buyer stayed away due to a range of reasons: the fuel efficiency didnt compare with that of two wheelers; it was a stylish car but looked rather fragile, etc

More over, positioning was also not done for two wheeler passengers use some innovative means to reach out, which are not conventional because this car, in terms of its concept, is not conventional. And so www.tatanano.com was born

Nitin Seth, general manager, Tata Motors, asked for suggestions on how the car can be made more attractive for women drivers triggering a discussion on will an Indian family buy a car with feminine touches only for the female in the family

In fact, the idea of online bookings, which will probably be a first for the car industry in the country, is believed to have originated during discussions on the Net The idea was to reach out to younger people. Even if they are not the buyers themselves, youngsters, who are hooked on to the Net and frequent social networking sites, will pressure their parents to buy the car

Moreover, To make the car more easily accessible to people, the Tata Motors team planned to sell the Nano not just through Tata car dealerships across the country, but also through conventional retail outlets like Westside and Croma

Tata motors is banking on towns similar to these and even smaller ones to boost the sales of Nano All the other changes that the team is making are meant to improve the product somewhat incrementally

But the rush to create tier-3 and tier-4 specific dealerships and SNAPs that sell and serve nothing but the Nano is the most important initiative in the entire revival effort The company opted for a 'hub and spoke model' to market Nano in rural zones. While the main dealer showroom are in metro or a tier-I city, smaller showrooms set up by a dealer are located in suburbs and rural zones

The warranty on the car and its parts has been increased from 18 months to 60 months and from 24,000 km to 60,000 km To address concerns of maintenance costs, Tata Motors offers a Rs 99 per month maintenance contract cars are serviced only through weekly visits by service vans

Tata Motors aims to close 2011 with over 1,200 sales points Maruti Udyog has 2,740 as of March 2010 So expansion rate of Tata Nano is quite high

Financing in rural areas is a manpower intensive job As against seven to 10 days to close a Nano deal in cities, rural areas require up to 25 days While it takes one or two customer contacts in urban areas, rural areas take up to eight meetings in-person to convince a buyer to close the deal

Tata motors tied up with 29 banks who have been assured that Tata Motors and its dealers will provide manpower support in lieu of competitive rates of financing Most banks have reduced Nano financing rates from 17 per cent earlier to 13.5 per cent that they offer in urban areas

Given that 85 per cent of all cars sold are financed, Tata Motors Finance, a 100 per cent subsidiary of Tata Motors, pitched in with an introductory offer of 8.99 per cent (against the going rate of 13.5 per cent) which continued till recently

The company is paying for 75 per cent of all promotional expenses the dealers are incurring in terms of events, fairs and haats All Nanos come at a months credit (there is no credit on fast-selling Tata vehicles such as Indica and Indigo), which saves the dealer Rs 3,000 in holding cost per car per month

Maruti 800 Nano Price Rs 1.9-2.3 lakh Rs 1.3-1.9 Sales per month 4000-5000 800 Units Fuel efficiency 18-20 km/l 16-18 km/l Maintenance Rs 300-400 Rs 300400 Engine 800 cc 623 cc