Poised for A Historic Takeoff

From India Shining to Nano India, Ratan Tata has managed the impossible. His miracle one-lakh car has taken the automobile world by storm, so much so that even Detroit, the Mecca of all cars, is sitting up and taking up notice. Suddenly, the small car is driving everyone nuts and big-ticket global players in the automobile industry are now discovering that small is beautiful and that size does not matter.

Ratan Tata's tryst with destiny is now a matter of time. It is a question of when, and not if. Nano will literally take over the Indian roads, and the middle class will grab its rightful space with more than a sense of haste. Why the middle class, Nano makes for an excellent second car/third car choice. The kids will love it, while you can drive in your Merc.

This much is quite predictable. Nano will survive the market, even if it does not match up to the expectations of the consumer. Nano's USP is, to over-state the obvious, its one lakh price tag. In other words, it can compensate for two two-wheelers, in terms of its value. So, when you HAVE to have a vehicle, you might as well go for a four-wheeler than a two-wheeler. The logic is so ridiculously simple that you have to credit the Tata Group for its marketing savvy. Ratan Tata was the first to glimpse at the truth and discover that he was on to something that was impossibly win-win.

For those who continue to keep skeptical of Nano's place in the market, here's a simple bit of analysis. According to reports, for Nano to be a viable business model, Ratan Tata is banking on selling four lakh cars. His captive market - the two-wheeler owners - comprises 80 lakh vehicles, out of which Tata will need a 5% market share, to hit the magical 4-lakh figure. A strike rate of 5% is well, like betting on the chance that Sachin Tendulkar will score at least one run in a match. Unless Nano makes a totally disastrous debut in the market - which is highly unlikely - it is more than likely to grab say, 20% of the Indian two-wheeler market. And, remember, we are talking about only the Indian market. Nano is certain to get an equal chunk from overseas markets.

So, Nano is not just a patriotic tug for Ratan Tata, it will make money too. And carloads of it. When it happens, remember you read it first here