Substitutes for this Tata ‘Nano’ already existed in the market from players like Maruti 800, Chevy Spark, Alto, Estilo, Wagon R, Reva electric car etc. Most of the car manufacturer has a product in this segment to defend their market share in terms of volume. From a customer perspective, the alternative vehicle for a Nano will be either purchase of a new car in small car segment or going for second-hand vehicle of same Nano’s cost. Other substitutes include LPG/Diesel/Petrol auto rickshaws which can be used for both personal and commercial use. Bajaj introduced TVS King, in auto rickshaw segment which had a good response not only for commercial use, but some preferred for personal use as an alternative to small car with fuel efficiency. The customer rational thinking in this buying process will be based on three costs, i.e.
Cost of the buying the vehicle
Maintenance cost ( spares, Fuel )
Resale value of the vehicle ( Depreciation value should be less )