Can a new electric avatar save the Nano?

The electric version of the Nano, now renamed the Jayem Neo as an electric vehicle, is expected to be launched into the market with great aplomb. The Nano which has been sellling much less than 500 cars a month in this year has been struggling to keep up with its reputation as the worlds smallest car and an innovation. ( also the cheapest ). Some reports say that dealers have stopped orders for the Nano and monthly sales struggle below the 200 cars a month mark. That’s quite a mighty fall for a car that was targeted to sell 20,000 cars a month when it was launched in 2009, at a price of Rs 100,000.

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But can an electric version of the Nano really succeed?

For one, the cheapest car in the world as an electric vehicle will now sell at Rs 5 lacs +(estimate from press reports) no longer making it the cheapest car in the market, which unfortunately was a part of the key positioning of the car. Tata will supply the body shells of the Nano to Jayem who will then fit the car with an electric transmission. While the car will not carry the Tata name and instead carry the Neo and Jayem name, people will perhaps take some time to forget that it is really a Nano. Whatever the shortfalls of the Nano, it was a good and catchy name. Its the car and the marketing that let it down.

Two cars with different names?

To complicate matters, Tata may sell a similar electric variant of the Nano under its own name sometime in the future. No doubt this will cause the confusion in the market because there will be two similar looking cars but with two different names. While large manufacturers are known to promote cars on the same chassis and platform, body shapes have made a big difference in the way those brands are perceived. A good example is the Vento from Volkswagen and the Rapid from Skoda. Marketed in the same price range, Skoda tends to add more bells and whistles to the Rapid than Volkswagen does for the Vento. So the two cars tend to appear well differentiated.

However the Neo is being launched with great enthusiasm and has received great support from Ola who has placed an order for 400 cabs for the fleet spec model which can do a run of 200 kms on a single charge. The private car buyers might have to wait a little longer for a version suited to their needs.

When a car is launched as a taxi does it have a negative perception?

One of the struggles that Indian car manufacturers have faced in the past is that when cars are launched as taxis, they tend to be seen as ‘not for individual buyers’. Unfortunately, when a car brand does not do well, companies are forced to sell to the taxi trade. So this is a bit of a vicious cycle. A good example of a brand that is seen as a Taxi brand is the Toyota Etios which sells large numbers to the taxi trade. This tends to make it unattractive to the individual buyer. So it remains to be seen whether the launch of the Neo as a taxi will encourage or discourage individual buyers and if Neo can break a well-known market rule.

How is the acceptance of electric cars in India?

While the country is moving towards zero emission norms by 2030, the acceptance of hybrid and electric cars has been slow in the country. The government has made it clear that it is anti-fossil fuel, but there are currently only 5000 electric cars in the country. This is in a market like India where the annual sales of passenger cars are almost 2.5 million. Which shows that the acceptance of electric cars is still very slow. Electric cars are a fairly evolved need. Consumers also need to see the benefit of going green and being environmentally conscious. The major disadvantages of electric cars currently are the distance they can cover on a single charge – 200 km in a big city is really not that much of distance. To add to the trouble, electric cars are not cheap, and in fact are turning out like the Neo to be more expensive than the petrol variants. Add to that the disadvantage of inadequate charging stations, which make the electric car an unattractive proposition.

So it needs to be seen what happens to the Neo. For the Tatas it is a brave step forward into the future that needs to be applauded.

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Prabhakar Mundkur has spent 40 years in advertising and worked in India, Africa and Asia. He is currently Chief Mentor with HGS Interactive a part of HGS in the Hinduja Group. He is on the advisory board of Sol 's Arc ( ) an NGO dedicated to special education for intellectually challenged children. He is also a member of Whiteboard ( ) which supports senior management of NGOs in financial management, PR, Communication and HR through pro bono expertise.

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