the-south-asian.com April - June 2008
The Making of Nano
Ratan Tata interviewed byChristabelle Noronha
are the innovations that have made the Tata Nano possible, from design to
When we were planning facilities for the car and working out a business plan, the business plan shown to me was looking at a figure of 200,000. I said a 200,000 car is crazy. If we can do this we should be looking at a million cars a year, and if we can't do a million then we shouldn't be doing this kind of car at all.
But such a figure (a million cars) has never been achieved in the country before. If it had to be done the conventional way, it would have meant investing many billions of dollars. So we looked at a new kind of distributed manufacturing, creating a low-cost, low break-even point manufacturing unit that we design and give to entrepreneurs who might like to establish a manufacturing facility. We looked at different ways of servicing the product, at the customer's location, and through a concept adopted from the insurance industry, wherein self-employed people are trained and certified by us. And we went back to innovation in design and scrupulously took, as much as we could, cost out of the product.
We did things like make similar handles and mechanisms for the left- and right-side doors; we developed our own small engine which could sit under the rear seat, enabling us to craft a smaller overall package; we looked at a new type of seats; and we worked at cutting costs everywhere. We have put our instrument cluster in the middle, not in front of the driver. This means the same dashboard will work for a left-hand-drive vehicle. There are a lot of such innovations that are low-cost and future-oriented.
Equally important to the cost structure was the incentive we could get from having our manufacturing facility at a particular place. The benefits on this count will be passed on to the customer.
Our move to West Bengal was a leap of faith and a sign of our confidence in the leadership in the state. We were breaking new ground, not only on the product front but also in helping industrialise a previously ignored part of India. But we did not start out getting the incentives that other states were offering. I remember telling the chief minister [Buddhadeb Bhattacharjee], "Sir, much as we have tried, it makes no sense for us to come to West Bengal. We cannot meet the cost requirements we have without incentives." It was then that we negotiated a set of incentives that, long-term, work out to be the same as we may have had if we set up in some other place.
Other than emission norms and safety standards, what are some of the other
challenges, physical and psychological, that Tata Motors had to overcome to
make this car happen?
However, we were always conscious that there should be no quality stigma attached to the buying of this product. One thing we were clear about: this was never going to be a half-car. Nobody wants a car that is less than everybody else's car. Our car may have a small engine and certain limitations in terms of being basic, but that does not make it inferior. Also, we have a higher version of the car — with air conditioning, leather seats, etc — that we will be displaying at the auto show in Delhi. We hope people will look at that, too. Down the line, as we widen our range, we will have dressed-up versions with higher-powered engines, diesel engines, automatics and the like. We have a whole bunch of innovations coming along on this platform.
What we now have is a car that is truly low-cost which has, approximately, the same performance as a Maruti 800 in terms of acceleration, top speed, etc.
future versions of this car hit the market, will they not be in direct
competition to the Indica?
About the criticism that the car will add to India's pollution problems…
what is generating so much criticism?
What did this do to the global watch industry? It enabled somebody to look at a wrist watch almost like cufflinks: you could buy 10 Swatch watches, you could wear different ones for different occasions. Swatch sold multiple watches for a single wrist. I think something similar could also happen with the Nano.
I think it [criticism] comes from vested interests. Let's ask ourselves why the car is attracting so much attention and why it is being attacked so much. My view is that if the car were not attracting all this attention, it wouldn't be attacked. This car has provoked serious apprehensions in some manufacturers. There are people in our company even who fear what it will do to the Indica. Do you think there's a concern among three-wheel manufacturers that it might replace their vehicles? Yes, there is because some three-wheelers cost more than what the Nano will cost. All in all, I think people are attacking us because they are apprehensive.
the Indica experience helped in the creation of the Nano?
Rs1-lakh car to products costing many millions, if the Jaguar deal comes
through: What next for the Tatas on the automotive front?
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