So all this talk of the Elio and it’s eminent demise (for entirely unrelated reasons) has made me decide to relate a story that may or may not have come across on this site or jalopnik. This is about an idea for a similar concept: The Tata Nano economy car.
This is an Indian domestic market vehicle designed explicitly to be as low cost as possible to meet the needs of india’s growing economy. When it was first produced, it could be had for as little as $2,000 US dollars, but due to increases it is now available for the equivalent of $3,500 dollars. The vehicle features some interesting qualities such as a 624 cc engine, only 3 lug nuts and a trunk that doesn’t open from the outside to save costs.
Import for the second generation was planned for the U.S and europe, but never happened. This could be for any number of reasons you could think of, but was probably because of the primary reason: It didn’t sell that well in India, and we would be much less interested than them. How poorly did it sell? Well, compared to estimates, the production was prepared for 250,000 cars a year, the best they ever got was 70,000. Now they are only selling about 7,000.
Now, these did have some issues with fires that were resolved. But mostly, like many other failed “economy” products, These have become synonymous with being poor. Not being “thrifty”, being poor. Nobody wants to look like they are poor, even if they are.( And, being india, they have a lot of poor) India also has the benefit of being close to the equator, which means motorcycles are one of the most practical methods of transportation.
Who buys the Tata Nano now then? According to my Indian business proffessor (who brought this to my attention) the Nano is bought exclusively by rich parents who want a disposable car for their kids so they don’t get into trouble. Not the poor.
So, thats a failure then. If you tell people that the product is designed for “lesser people” than that is the impression the people buying it will get about themselves. We know this type of product is healthy and good for people who are struggling, and that most of the time they are good people. We also know products like this can be successful. The beetle was sold for the equivalent of today’s 5,300$. That was a different time, sure. However the same principals apply.
Was it billed as economical? Sure. Was it billed as cheap? No. Ads featuring quality and resale value were just as prominent as ads featuring it’s low price.
So the lesson of the day? Marketing products aimed at low incomes is difficult. When you make a product to adress those needs, it better be top notch and just as useful as a comparable item. Utility and longevity have to be front and center. And, most importantly, it has to be more appealing than a used, nicer car, or a new high end motorcycle. The idea of buying new itself really isn’t that appealing. So despite how much we like 3 wheel cars here, do you really think the Elio would be successful?