How to get stuck in low gear

Last month in an issue of The Economist (Aug 20th issue), I read an interesting story about the Nano (see the picture below), an inexpensive car built by the Indian company Tata Motors.

The story was titled Stuck in low gear. Here’s a little taste:

Since its launch with great fanfare in 2009, the Nano has swerved from one crisis to another… Sales, which had been predicted to be 20,000 a month, fell as low as 509 in November last year. Sales recovered to 10,000 a month in the spring, but have fallen back again this summer: 3,260 in July, amid a slump in the Indian car market caused by rising interest rates and fuel prices.

“The Nano is a brilliant concept”, says Hormazd Sorabjee, editor of Autocar India. He has driven 10,000 miles (16,000km) in his, and praises the car’s roominess, fuel economy and general nimbleness around town. “It does the job, it feels good with its high seating position, but it is a monumental marketing blunder.”
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My 2¢: I can’t say that I was surprised to find out that Nano is, as The Economist suggests, stuck in low gear.
You see, the Nano may be the cheapest car on the market, but people want more than logic. It’s easy to forget that.

People from the old style of business thinking would probably say Tata Motors’ business is the car business.
But Tata Motors’ business is not cars—it’s lifestyle.
Their rival Maruti, the leader in India’s small-car market, gets it—just watch the video.

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