Tata Motors is going to auction its first 100,000 Nano automobiles in India to customers chosen by lottery, at a retail price that starts at about $2,000.
The thing looks like a Pinewood Derby body stuck on a lawnmower, is named after an mp3 player, and seems sized to fit four full-bodied Australopithecus, but nevermind all that: it's cheap, gets 55 miles to the gallon and travels about that far in an hour, and could forever change the automotive retailing landscape worldwide.
It does so by two ways:
- What it is. A small car made out of what might be no more than aluminum foil, mass-produced and sold for the cost of a really nice desktop computer, means that lots of people could buy it. So don't think about it as a second or third car...but rather just another car that could be used if and when useful. Suddenly, the debate isn't about replacement, but simply an alternative to driving one of those larger, gas-guzzling SUVs in the 5-car garage. It's very possible that the way to move the conversation about conservation significantly forward is to stop trying to have our proverbial cake, and eating it too. The Nano could get into enough hands to be a default choice when travel doesn't require great speed, style, or comfort.
- How it's sold. A lottery is such a cool idea. It's a game, sort of, and it acknowledges demand without overtly trying to exploit it. The distribution challenge for the Nano is to get a lot of them out on the road as soon as possible; only then will people be able to get over some of their safety concerns (the presumption, however faulty, that big cars are somehow safer has helped drive the SUV business). I wonder it Tata will consider other sales models. I've got one idea: give the cars away, and charge for brokered fuel deals, services, etc. I suspect that this little vehicle has the potential to turn the auto dealer model on its head (pulling the model out of the grave first, of course)
I've been a fan of Tata for some time now. This is the company that bought Jaguar and Land Rover from Ford, both because it wanted high-end offerings, but also to repurpose the design and manufacturing knowledge across all of its product lines. Tata innovates, in real and meaningful ways, and isn't afraid to experiment with similar conviction. It's no surprise that it's selling Nanos by lottery; just like in the beer business, we're seeing some of the boldest, most radical marketing ideas coming from companies that don't come from the staid economies of North America, Europe, or Asia.
A true people's car like the Nano could really shake up our automotive markets.
Too bad its estimating that a U.S. version is two years away. I say let's skip trying to bailout or legislatively run the car companies currently in trouble -- and evidencing no real capacity for risk or experimentation -- and throw the public money to incentivize better competitors, like Tata, to move up their production plans. Why pay companies to try to come up with vehicles as competitive as the Nano, or to try and learn novel marketing techniques that Tata has already pioneered?
Let's invest in making a thriving market out of the crumbled dust of one that is terminally decrepit. Such a re-energized market could then decide which companies will ultimately win or lose.
I'll bet on the people's car.