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Updated August 14, 2024You’re reading an excerpt of Great Founders Write, by Ben Putano, writer, entrepreneur, and book publisher. He’s the founder of Damn Gravity Media, a publishing house that inspires and educates tomorrow’s great founders. Purchase now for lifetime access to the book and on-demand video course.
Ratan Tata—the president of India’s third-largest automaker, Tata Motors—was traveling home from work one day in 2003 when he noticed something that disturbed him.
It was a dark and rainy evening. While Mr. Tata was safe in his luxury vehicle, he saw a family of three dangerously riding through the muddy streets of Mumbai on a two-wheeler. In India, electric bikes and mopeds are three times more popular than automobiles, so this sight was not unusual. But it sparked an idea in Mr. Tata—an opportunity to help India’s burgeoning middle class … and mint a new fortune in the process.
What if Tata Motors created a car that was as affordable as a moped?
Mr. Tata became obsessed with the idea and made an impassioned pitch to his board. The company got to work soon after. Over five hundred engineers spent more than four years designing a vehicle that wasn’t just comfortable and safe, but extremely affordable. When the Tata Nano was unveiled in 2008, industry analysts hailed it as a miracle of business and engineering. Best of all, it cost just $3K USD. Pundits were already declaring victory for Tata.
Yet despite a massive marketing effort, sales of the Tata Nano never reached expectations. Its popularity fizzled quickly after the launch. By 2017, the company halted regular manufacturing and only made the vehicles to order. In 2018, they made just one unit—a single Tata Nano rolled off the manufacturing line.
Tata Motors only ever produced 300K Nanos. By comparison, one Toyota factory in Georgetown, Kentucky, makes over 550K Camrys every year. The Nano was an unmitigated failure.
How did things go so wrong?
The logic behind the project was sound. There were millions of Indian families who needed an affordable car, and the Nano had everything they could ever want. But no one bought it. Ironically, the Nano was most popular among rich businessmen. They bought it as a toy—a gimmick to show off to their friends. You can imagine Mr. Tata’s frustration. He built exactly what the people of India needed—or so he thought. Was it possible he missed something?
Turns out, the Tata Nano was doomed from the moment it was announced. When Mr. Tata unveiled the Nano at the Auto Expo in 2008, it was accompanied by a horrendously out-of-touch slogan:
“The World’s Cheapest Car.”