Tata Motors turns to retail

17 March 2011

NEW DELHI: Tata Motors, the Indian automaker, is seeking to boost sales of its Nano "minicar" by selling it through the stores of discount retail chain Big Bazaar.

Owned by Future Group, Big Bazaar started offering Tata Motors' pioneering low-cost vehicle to shoppers in 120 outlets around a month ago.

"This began as a pilot project to see whether a car can actually be sold through a hypermarket," said Sandip Tarkas, Future Group's customer strategy president, told Livemint.

"So far, it has lived up to the expectations."

More specifically, Big Bazaar has sold 450 units to date, or 5% of the total 8,262 Nano purchases made by Indian consumers across February 2011.

"There is a lot of commonality between Big Bazaar consumers and prospective Nano buyers"

"Big Bazaar as a concept appeals to the masses and with over 150m footfalls every year, we are trying to see how we can sell Nano, which has a similar positioning."

"The arrangement has been in place for over a month now and we're encouraged by the results so far."

This approach marks the latest evolution of Tata's efforts to stimulate demand for the Nano after sales hit just 509 vehicles in November 2010.

It has begun using an increasingly diverse range of alternative vendors, as well as kiosks, to engage potential customers in different settings than car forecourts, and also offers several financial plans.

"Tata Motors may have now realised that for a product like Nano, conventional distribution systems such as car showrooms can only help to an extent," said Sonam Udasi, head of research at IDBI Securities.

"Big Bazaar's customers, mostly value conscious people, will directly fit in the profile of Nano buyers."
Given the promising results of this trial scheme thus far, Tata Motors and Big Bazaar are considering their options as to how it can be developed going forward.

"We believe there is synergy in the customer segment being targeted by Tata Nano and the Future Group through their Big Bazaar outlets," Debasis Ray, Tata Motors head of corporate communications, said.

Data sourced from Livemint/Economic Times; additional content by Warc staff