The Ace of Cars
A case study on Tata Ace
Tata Ace
The Scene Before
Tata
Others
High market share
Large manufacturing capacity
Recession of 1998-99
Action
Four segments:
- Intermediate commercial vehicles
- Light commercial vehicles
-
Medium Commercial vehicles and above
- Sub-four-tonne market
Problem
Three-wheeler commercial vehicles
WHY?
Reduced cost
Faster Transportation
Analysis
Affordable four-wheeled truck
More stability
Greater safety
Greater comfort
All-weather protection
Greater load-carrying capacity
I want this!
Best Option
Light commercial vehicle
Capacity: four tonnes
But over Rs 5 lakh
The Final Trigger
Heavy and small commercial vehicles would rule rather than medium commercial vehicle
Ratan Tata was pushing the group to identify growth opportunities in the domestic market, especially at the bottom of the pyramid.
Innovation
Product Innovation
Two-cylinder engine
Eventually became their USP
- Cost a third of its competitors
- Offered optimum performance
- Fuel efficiency of a three-wheeler
- Met appropriate vehicular norms
Innovation
Collaborative effort by suppliers
Process Innovation
Adopted a systematic product introduction process
Designed by Warwick Manufacturing Group.
Launch
First mover advantage
Swept the market
Every fourth truck sold in India is a Tata Ace
Created an all-new segment:
Small light commercial vehicle,
Tata Ace accounts for 40 percent of Tata Motors sales in volume terms.
Myth vs Reality
What can we learn from them?
" None can destroy iron , but its own rust can.
Likewise, none can destroy a person, but his own mindset can."
What can we learn from them?
"Innovation is
difficult in the beginning. There will be a lot of naysayers. Support from top
leadership helps in crossing the first threshold."