Nano - Tata bid to capture Indian Car Market

Though one does not know the actual cost breakup of the Nano, it is likely that Ratan Tata won't mind selling it at a slight loss. In spite of all the hype about nation building, this is a purely business decision.

• Manufacture low end product and deliver to capture market even if at an initial loss.
• Move up the value chain using the leverage as the dominant car manufacturer.

Tata already has some penetration on the car segment through its Indica series. The Nano will strongly challenge Maruti's long hold as the numero uno car manufacturer. If it succeeds, Ratan Tata deserves full credit from a business perspective as he was willing to take that risk.

In the next post, I will look at some of the pros and cons of the Nano for India as a whole