Ratan Tata’s auto journey: From the Nano’s botched marketing to the emergence of Tata Motors as India’s EV leader

The Tata Nano was launched in 2008. Ratan Tata said it was “always meant for all our people”. The Nano was often referred to as India’s first ‘lakhtakia’ – a car which costs all of Rs 1 lakh, a few thousands more expensive than two-wheelers. It was marketed as the cheapest car in the country. But there was a problem: no one seemed to want one.

“What really motivated me, and sparked a desire to produce such a vehicle, was constantly seeing Indian families on scooters, maybe the child sandwiched between the mother and father, riding to wherever they were going, often on slippery roads… At first we were trying to figure out how to make two wheelers safer, the doodles became four wheels, no windows, no doors, just a basic dune buggy. But I finally decided it should be a car. The Nano was always meant for all our people,” Tata wrote on Instagram in 2022.

Even before the Nano could hit Indian roads, it faced many speed breakers. The car was initially supposed to be manufactured in West Bengal’s Singur, and the former Left front government had even allocated the land for it. Then came the protests, with Mamata Banerjee, then in the Opposition in the state, creating enough of a stir which ultimately resulted in the plant being shifted to Gujarat’s Sanand.

A few years after the Nano’s launch, the numbers weren’t ticking and realisation dawned on Tata. Just about five years after its launch, the Nano was being gradually written off. In an interview in 2013, Tata admitted that its image of being a poor man’s car had acted as a “stigma”.

The tryst with Ford, and a symbolic win

The Nano is such a pivotal moment in the Tatas’ automotive history that it is easy to forget that they did make cars much before the Nano – and that too had a rocky start. Right around the corner when the Tata Group was working on the concept of the Nano, the conglomerate was also considering selling its passenger car division after its debut hatchback, the Indica, had failed to deliver on its expectations. A lot is known about the famous unsuccessful deal between Ford and Ferrari which prompted the former to build a car that could defeat the Italian powerhouse at the 24 hours of Le Mans, an endurance focused car race. But, the Tatas have their own underdog story, when after initial discussions, the Ford Motor Company decided not to purchase their passenger car business.

In 2008, Tata Motors acquired Jaguar Land Rover (JLR) from Ford for $2.3 billion – the price was just half of what Ford had paid for the iconic British brands a decade earlier. That same year, the global financial crisis struck, severely impacting key markets like the US and the UK. Between June 2008 and March 2009, JLR’s sales plummeted 32 per cent, from 2.5 lakh units to 1.7 lakh units. During this period, the company also posted a net loss of 281 million pounds.

“When we bought (JLR), my friends distanced themselves from me, saying, ‘What are you going to do with this?’ Quite frankly, I didn’t know. And that refrain changed to ‘How stupid could you be to buy this?’” Tata said in 2019 at an event in Brussels.

At the time, Tata Motors had acknowledged the challenge of keeping JLR afloat amid the financial crisis. The company believed, however, that new products and aggressive marketing could help it weather the storm, though it would require changes in traditional practices and a strong commitment to cost-cutting and “reduction of development and productionising time”.

By 2010-11, the turnaround had begun: global sales rebounded to 2.4 lakh units, and profits before tax soared to 1.1 billion pounds. Tata attributed the revival to “recreating” and “reigniting” the brands’ images. “I’m pleased to say I did nothing more,” he recalled.

Fast forward to 2023-24, JLR sold over 4.3 lakh units, generating a record 29 billion pounds in revenue, up 27 per cent year-on-year, with a net profit of 2.6 billion pounds. Now, JLR aims to achieve net zero across its supply chain, products, and operations by 2039, with plans to transition Jaguar to an all-electric brand and launch electric models for its Range Rover, Discovery, and Defender collections by 2030.

Ratan Tata during the launch of the Nano. (Express Archives)

ICE to EV revolution

Today, Tata Motors, the conglomerate’s vehicle division, is at the forefront of the electric vehicle (EV) revolution in the country and has seen a turnaround in its fortunes in the internal combustion engine market as well.

With demand for its cars falling even as rivals like Maruti Suzuki and Hyundai were competing for the top spots, Tata Motors drew up a revival plan. In 2019-20, they made the ‘Turnaround 2.0’ strategy with an aim to share common platforms for operational efficiency and also the push the company into the EV segment. What followed were one hit after another.

Ratan Tata at the launch of the Nexon EV. (Express Archives)

First came the Tata Tiago, a small family hatchback, which was shortly followed by a sedan, the Tigor. Then came the Nexon in 2017, and with it the real turnaround of the company. The Nexon managed to tap into the growing frenzy for urban utility vehicles. Today, the car has sold over 7 lakh units.

Though four-wheeler EVs are still a tiny fraction of the overall car sales in the country with overall electric infrastructure such as charging points continuing to be a sticking point, no other automaker in India can currently counter that proposition from the Tatas, with EV variants of the Tigor, Tiago, Nexon, and mostly recently, Punch, on offer. With a market share of 73%, Tata sold over 150,000 EVs last year. Not to forget, the company is the country’s largest commercial vehicle manufacturer by a wide margin.