“Because a promise is a promise”

A Case study on how Tata Nano was developed.

Submitted By

Venu Gopal V

08PG0146

B-Section

CUIM.

Tata Nano

Reason for NANO spark:

Speaking at the unveiling ceremony at the 9th Auto Expo in New Delhi, Mr. Ratan N. Tata said, “I observed families riding on two-wheelers – the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby. It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family. Tata Motors’ engineers and designers gave their all for about four years to realize this goal. Today, we indeed have a People’s Car, which is affordable and yet built to meet safety requirements and emission norms, to be fuel efficient and low on emissions. We are happy to present the People’s Car to India and we hope it brings the joy, pride and utility of owning a car to many families who need personal mobility.”

Vision:

“The vision was to give the people of India a car which is not produced anywhere else in the world. Through Nano, which denotes high technology and small size, I have tried to provide a reliable mode of transport to every Indian family,”

-Mr.Ratan Tata

Present Scenario:

Tata Nano was planned to be launched in September 2008, the first batch of 3000 cars was manufactured from the Tata Motors Pune plant, and a new plant exclusively for Nano was planned in Singur, West-Bengal. But due to the circumstances project was shifted to new location Sanand in Gujarat. The 2000 crore project will be now from the new location, the bookings of Nano will start from last week of Feb-2009.

The mother plant, which will begin producing 2, 50,000 -3, 00,000 cars per annum, has the capacity to expand its production to 5,00,000 cars in the coming years. The Tata’s also have plans to build electric cars and CNG variants from this plant. The Tata complex at Sanand will initially house 60 ancillary units.

The first batch of Nano will be rolled from 'makeshift' facilities located in Tata Motors' existing factories in Pune and Pantnagar. Initial production volumes will be lower because of the delay caused by the events at Singur.

Operations: Thinking outside the patent box

Tata Motors could make a car so inexpensive for the reasons that It started by looking at everything from scratch, applying what some analysts have described as 'Gandhian engineering' principles - deep frugality with a willingness to challenge conventional wisdom. A lot of features that Western consumers take for granted - air conditioning, power brakes, radios, etc – are missing from the entry-level model.

More fundamentally, the engineers worked to do more with less. The car is smaller in overall dimensions than the Maruti, but it offers about 20 per cent more seating capacity as a result of design choices such as putting the wheels at the extreme edges of the car.

The Nano is also much lighter than comparable models as a result of efforts to reduce the amount of steel in the car (including the use of an aluminum engine) and the use of lightweight steel where possible. The car currently meets all Indian emission, pollution, and safety standards, though it only attains a maximum speed of about 65 mph. The fuel efficiency is attractive - 50 miles to the gallon.

Hearing all this, many Western executives doubt that this new car represents real innovation. Too often, when they think of innovation, they focus on product innovation using breakthrough technologies; often, specifically, on patents.

Tata Motors has filed for 34 patents associated with the design of the Nano, which contrasts with the roughly 280 patents awarded to General Motors every year. Admittedly that figure tallies all of GM's research efforts, but if innovation is measured only in terms of patents, no wonder the Nano is not of much interest to Western executives.

Measuring progress solely by patent creation misses a key dimension of innovation: Some of the most valuable innovations take existing, patented components and remix them in ways that more effectively serve the needs of large numbers of customers

To summaries Tata were able to deliver the ultra low priced car as promised for the reasons mentioned below,

- The entire car was designed from the scratch keeping in mind of the cost saving techniques.

- Profit on per car is minimal but the ROI is on the number of cars Tata can sell.- Tata were able to convince the vendors to give away some amount of their profit

margin to reduce the cost of the car, but assured them that this won’t hit their overall revenue as the quantity of products would be huge and the vendors would get it back by economies of scale.

- Tata asked vendors to locate close to the factory location as the transportation cost could be minimal.

Features

Stylish, comfortable

The People's Car, designed with a family in mind, has a roomy passenger compartment with generous leg space and head room. It can comfortably seat four persons. Four doors with high seating position make ingress and egress easy. Yet with a length of 3.1 metres, width of 1.5 metres and height of 1.6 meters, with adequate ground clearance, it can effortlessly maneuver on busy roads in cities as well as in rural areas. Its mono-volume design, with wheels at the corners and the power train at the rear, enables it to uniquely combine both space and maneuverability, which will set a new benchmark among small cars. When launched, the car will be available in both standard and deluxe versions. Both versions will offer a wide range of body colors and other accessories so that the car can be customized to an individual's preferences.

Fuel-efficient engine

The People's Car has a rear-wheel drive, all-aluminum, two-cylinder, 623 cc, 33 PS, multi point fuel injection petrol engine. This is the first time that a two-cylinder gasoline engine is being used in a car with single balancer shaft. The lean design strategy has helped minimize weight, which helps maximize performance per unit of energy consumed and delivers high fuel efficiency. Performance is controlled by a specially designed electronic engine management system.

Meets all safety requirements

The People's Car's safety performance exceeds current regulatory requirements. With an all sheet-metal body, it has a strong passenger compartment, with safety features such as crumple zones, intrusion-resistant doors, seat belts, strong seats and anchorages, and the rear tailgate glass bonded to the body. Tubeless tyres further enhance safety.

Environment-friendly

The People's Car's tailpipe emission performance exceeds regulatory requirements. In terms of overall pollutants, it has a lower pollution level than two-wheelers being manufactured in India today. The high fuel efficiency also ensures that the car has low carbon dioxide emissions, thereby providing the twin benefits of an affordable transportation solution with a low carbon footprint.