Tata Nano. The launch of the People's Car by Tata Motors is a defining moment in the history of India's automotive industry. For Tata Motors, the car - christened the Nano, because it is a small car with high technology - is the next big step in a journey

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University Degree Business and Administrative studies

                

INTRODUCTION OF TATA NANO

“Dream-dream and dream, because dream gives vision, vision gives thoughts and finally thoughts lead to the action". Each letter of these motivational words said by India's former President Dr. A.P.J. Abdul Kalam goes exactly with Mr. Ratan Tata, Chairman of Tata group, who in the year 2003, dreamt of producing a safe, affordable Car for the common man. Finally after the wait of five years, crossing all financial and technological barriers, Ratan Tata kept his promise and unveiled Tata 'Nano' on 10th January 2007, at the 9th Auto Expo 2008 in New Delhi. Tata Nano, cool & smart, launched by Tata Motors is world's cheapest Car with a price tag of $ 2500

The Making Of Tata  Nano  

Ratan Tata rolls the window down and talks about the vision and conviction, the innovation and improvisation, and the leap of faith that went into creating the People's Car.

The launch of the People's Car by Tata Motors is a defining moment in the history of India's automotive industry. For Tata Motors, the car - christened the Nano, because it is a small car with high technology - is the next big step in a journey that began with the Indica. For the Tata Group, it is the realization of a pioneering vision to create a breakthrough product globally that rewrites the rules of the small-car business.

What does this path-breaking Endeavour really mean for the Chairman of the Tata Group, in many ways the inspiration behind the car? That's what Christabelle Noronha set out to discover when she met Mr Tata at Pune, as 2007, a momentous year for the Group, was drawing to a close.

There has always been some sort of unconscious urge to do something for the people of India and transport has been an area of interest. As urbanization gathers pace, personal transport has become a big issue, especially since mass transport is often not available or is of poor quality. Two-wheelers - with the father driving, the elder child standing in front and the wife behind holding a baby - are very much the norm in this country. In that form two-wheelers are a relatively unsafe mode of transporting a family. The two-wheeler image is what got me thinking that we needed to create a safer form of transport. My first doodle was to rebuild cars around the scooter, so that those using them could be safer if it fell. Could there be a four-wheel vehicle made of scooter parts? I got in touch with an industry association and suggested that we join forces and produce what, at that point, I called an Asian car: large volumes, many nations involved, maybe with different countries producing different sets of parts¦ nobody took the idea seriously, nobody responded.

This was similar to what happened when we wanted to get going on the Indica. I had proposed a partnership with an industry body to create an Indian car, designed, developed and produced in India, something that could be conceptualized and executed as an Indian enterprise. Everybody scoffed at the concept. I remember people saying, "Why doesn't Mr Tata produce a car that works before he talks about an Indian car." My confidence got a boost when we finally succeeded with the Indica. Willy-nilly, we decided to look at [the low-cost car] project within Tata Motors.

It was never meant to be a Rs1-lakh car; that happened by circumstance. I was interviewed by the [British newspaper] Financial Times at the Geneva Motor Show and I talked about this future product as a low-cost car. I was asked how much it would cost and I said about Rs1 lakh. The next day the Financial Times had a headline to the effect that the Tatas are to produce a Rs100,000 car. My immediate reaction was to issue a rebuttal, to clarify that that was not exactly what I had said. Then I thought, I did say it would be around that figure, so why don't we just take that as a target. When I came back our people were aghast, but we had our goal.

Today, on the eve of the unveiling of the car, we are close to the target in terms of costs. We are not there as yet, but by the time we go into production we will be. This project has proven to everyone that if you really set yourself to doing something, you actually can do it.

Two-three important events have influenced the development of the car; inflation, for one. The cost statement was made three-four years back but we are holding on to that price barrier. This will definitely diminish our margins. The price of steel, in particular, has gone up during the intervening period.

A second point is that we initially conceived this as a low-end 'rural car,' probably without doors or windows and with plastic curtains that rolled down, a four-wheel version of the auto-rickshaw, in a manner of speaking. But as the development cycle progressed we realized that we could - and needed to - do a whole lot better. And so we slowly gravitated towards a car like everyone expects a car to be. The challenge increased exponentially; there was the low-price barrier, inflation, adding more features and parts to the vehicle, substantial changes in basic raw materials€¦ What the team has been able to achieve, in the face of all these constraints, is truly outstanding.

Why India Must Think Small to Stay Big  

Ratan Tata looks positively relaxed as he walks into the lounge of Mumbai's private airport for this meeting. He has been awake since 3am and has just flown in from the south. There are hardly any signs of fatigue as he poses for pictures before the interview is scheduled to begin.

As the coffee comes in, Tata sends word to remind his driver to have his meal as he is going to be late. The first thing that strikes me about this man is his humility and disarming attitude. Remember, he is India's most powerful corporate chieftain who is equally well known across the world.

The topic now shifts to the all important Rs 1 lakh car and the rationale of moving down the value chain. Is this the best route and does it make sense to ignore the more profitable premium category?

If you look at India, you have about one billion people growing at about 17-18 million a year. You have a middle class or a consuming class of about 250 million, which is increasing from the bottom up each year. And you have a higher percentage at the top of the pyramid, which has been the buying public hitherto for most Indian products.

There is also a segment of the market that is brand conscious, prestige-conscious and would often even prefer to buy foreign brands to Indian brands. They know what is happening elsewhere in the world and would prefer to put their money on a foreign brand rather than an Indian brand, he explains.

In the automobile sector, other than Tata Motors and Mahindra & Mahindra, the industry here largely comprises of foreign companies. As Tata says, while it is an issue of great satisfaction that these two Indian companies have been able to get meaningful market shares. in this arena, only the top part of the pyramid is being addressed.

Hence, the million-plus cars being sold are going mainly to that segment and somewhat to the top end of this large consuming area. I had projected that we would be a million cars in 2000 but that did not happen because we were in an economic downturn.

So we can say that in 2007, our market would be 1.7 million or two million units. But is that really the market potential of the country? After all, it is one where the people buy six million two and three wheelers, which is six times the passenger car market, he says.

As everyone is aware, this is obviously because of the price disparity. The point therefore, he adds, is to be able to address the lower market somehow with a reasonable acceptable product. India, in any case is a country where people have a tremendous urge to own but often it is beyond their reach.

Why do you see such a great sale of clothing on a foot path? Why is Fashion Street in Mumbai so popular? The guy in the factory wears clothes that at least look like what the higher end wear. The fact that they come from Tibet or Nepal is not an issue.

Why is it that the same footpath sources are able to sell tennis or running shoes even if they are fraudulently branded Nike or Reebok? The person is aware of those brands, wants them but cannot afford to pay for them. So, he settles for these, remarks Tata.

What is clear is that if branded product manufacturers can address that market, it is a huge opportunity. The bigger question is the ability to address it and this where Tata believes it is possible.

If we are looking at a small car, we should not do this at the same proportion as cars of today are being looked at. We should be bold and take some risks so that we can have a much larger scale of consumption of that product in India or elsewhere. We need to take a gamble on that and that is my take on addressing that wider market, he says.

Tata believes that this is something that needs to be done because otherwise the Chinese will address that market in India with a suitable product. All that they will do is to squeeze the Indian manufacturers into a position at the higher end of the market, denying him access to the larger market.

We can certainly increase numbers by addressing the lower end on lesser margins but still be profitable. The Ace has been an example at the commercial vehicle end. It is the same thing where you are getting much more for that vehicle.

You must not be overpricing the value for what you are providing. If you can answer that, then it makes sense. Then if you take it further and put power steering, provide air conditioning and so on, it becomes an attractive product that others cannot compete with, he says.

According to Tata, the Rs 1-lakh car would probably be out towards the end of 2007-08. The way it is being planned now, it is going to be a rear engine car, essentially steel, with some plastic parts. It will be a five seater with four doors. No decision has been taken as yet on the engine capacity.

The car will have a continuous variable transmission. At that low cost, it will not have a clutch and will be easier to drive without any gears. It will be a product that will be simpler to deal with, easier for women to drive and something that we hope will add value to the customer, he says.

Tata Motors will produce the bulk of the production in its plant. This is where the entire concept becomes interesting. We What we also wish to do, which is still not fully clear and a concept at this point of time, is to create any opportunity for entrepreneurs, he says.

Low cost units in different parts of the country will assemble the car where Tata Motors will take the responsibility for training on site and other aspects related to quality etc.

We will give young entrepreneurs the opportunity to establish enterprises in distributed areas to produce this for us. We will produce all the high volume parts and send them as kits to these assembly units. This will also enable us to address some international markets in Indonesia, Africa etc on the same kind of basis.

Tata’s people’s car:

 Tata’s one lakh car is the most expected car in recent times not only in india, the whole world is anticipating for the car. “The one-lakh car is a case study which the whole world is watching. If successful, the car can spark demand in a new segment all over the world” reports JD power an automotive rating and research firm. That’s why every news and rumors about the low cost car is getting covered in almost every magazines, every newspapers and every web portals even the mighty Business week and BBC is reporting about the developments of the car. The most expected car has also become the most controversial car in Indian history. Whether its the singur controversy or the competitors criticism in one or many ways the one lakh car is making news.

While the Chevrolet Aveo, currently the cheapest car in the US, costs around $ 10,350 while Europe’s low cost contender the Dacia Logan costs around 6000 euros. Coming to india while most manufacturers are finding difficult even to make a 100cc bike for Rs40000 Tata is building a car for 1 lakh ($2500) and Tata has to break its own achievements and has to set new levels of benchmarks in design, production, assembly, logistics and whereever they can to produce a car at such a price.

Can the Tata’s meet the expectations? Will the one lakh car convey the india’s potential to the world? Will Tata stick to its price tag? Will it make sense for Tata to have a car when other players are moving to premium segments? Will the more demanding customers will like the low cost machine? In this preview we will find answer for all these questions also we will know how tata is cutting the cost in all domains to adhere to its price tag.

Name for the Commuters car:

The most watched car in the Indian car space — the Rs 1-lakh ($2500) offering from the Tata Motors stables — is still unnamed, but company sources here believe that `Jeh’ is emerging as the `most favoured name’. “It has always been our Chairman Mr Ratan Tata’s dream to name one of the cars after J.R.D. Tata,”said a Tata official.

What’s the 1 lakh car all about?

Tata says the proposed Rs 1-lakh car would be a vehicle that “will seat four to five people and have a rear engine. It will not be a scooter, three-wheeler or an auto-rickshaw made into a car.” “It will also not be a stripped down car. It will be an inexpensive car,” he said, but added that it would obviously not have the finish or the high speed or the power of a larger car. It would be a rear engine, 4-5 seat, four-door car with about 30 hp (horsepower) engine. Though it is tough to preview a car which is guarded highly by its manufacturer, we will unveil as much we can in this post. The price we have announced is the price we are launching the car at. Tata never said the price will never rise. But he  can’t say if it did, when.  When the Maruti van was first launched I bought one of those for Rs 50,000.Of course now that product is not available at that price. Our Endeavour with the Nano will be to hold our price as much as possible axAbout.com, All rights reserved.

  • MODELS OF TATA NANO
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Yesterday, there were media reports indicating Tata Motors would unveil a high-end variant of people’s car or 1 lakh car (jeh) at the upcoming Geneva Motor show. It is very obvious that Tata Motors would launch the one lakh car across the globe and will customise it depending on the market demand.  For South East Asian Nation, it’s almost sure that Tata Motors will produce the one lakh car in Thailand plant. It recent years, Tata motors is very bullish on Thailand. Tata Motors is building an assembly plant  in alliance with Thonburi Automotive to sell the Sprint pickup in Thailand from March 2008. Tata Motors has also submitted a request to Business of Foreign Trade in Thailand to set up an assembly plant for eco cars with a capacity of 100,000 units at an investment of over $250 million (1000 crores) in Thailand. Connecting the dots, we come to know that Tata Motors will produce an environment friendly variant of one lakh car in Thailand. CNG and LPG is likely to be the option. In addition, Tata will produce a much powerful (engine with a capacity of 1000cc) one lakh car in Thailand to cater to the needs of the region which are currently dominated by Japanese majors like Honda and Toyota.  Safety features like airbags and ABS will be added to the one lakh car to comply the safety standards

Tata plans $250m eco-car plant in Thailand

Few weeks back we reported you on Global auto makers plan to make Thailand an eco-car hub under the heading Is Thailand edging out India?

Tata Motors which will soon roll out the new generation sprint through its alliance with Thailand based Thonburi. Tata Motors will produce 35,000 pickups from 2008 in Thailand. Now, it plans to make 1lakh environment friendly cars in Thailand. Global Auto maker are making queue in Thailand to avail the tax breaks offered by the Government of Thailand to companies that produce hybrid vehicles. For more details read click the link specified above. Tata Motors has submitted an application to build a new eco-car assembly and parts plant, with annual output capacity of 1,00,000 to Thailand’s Board of investment. Tata Motors will invest around $250 million (1000crores) for the Thailand plant. Tata has already invested $43 million for the pick-up plant.

Ace pick-up:

Tata Motors may also produce a pick-up based on its small truck- Ace for the Thailand market. It has already launched the passenger version of Ace, called Magic, in the domestic market. Tata’s Magic could be re-engineered to a pickup and made available under different eco-friendly fuel forms like compressed natural gas (CNG) and liquefied petroleum gas (LPG) to meet the emission norms.

When many of us prefer Honda’s and Suzuki’s over Tata and Bajaj, we fail to notice Indian manufacturers are making great strides in many parts of the world. Tata, Mahindra & Mahindra, Bajaj and TVS begin to attract customers across the world not just in under-developed countries but also in developing countries and developed countries. Unlike Chinese manufacturers, an Indian manufacturer does not make any copycats and they are not facing any litigation. Apart from the trucks where it’s a world leader, Tata’s passenger car division is making its own mark in world automobile market. Tata sold its indica in Europe till 2005, it sells indica’s, indigo’s, TL sprint, sumo’s and safari’s in most parts of Africa and south America. Tata plans to make a comeback in Europe and it is building a assembly plant in Thailand. Tata motors also plans to debut in Russia. Mahindra has joint ventures to sell its vehicles in South Africa and Europe, and a local distributor in Malaysia. It has manufacturing facilities in Uruguay, and will soon set up plants in Egypt and Russia. Soon it plans to enter the toughest American market. Bajaj Auto which already has a significant presence in Colombia and most of the Asian and African countries such as Srilanka,malayasia, bangladesh,guatemala, Indonesia and south Africa is planning to roll out pulsars in iran. Bajaj auto is one of the largest exporters of three wheelers. You can find Bajaj’s three wheeler even in Europe and Unites States of America. Bajaj Auto has said in the past that it would like exports to touch the 10lakh mark by 2010 and be a significant part of the overall revenue. Today, exports are close to percent (Rs1700crores) of the company’s total revenue. TVS motors have built a plant in Indonesia and has already rolled out a step-thru in that market. TVS plans to use the Indonesia plant as its manufacturing hub for exports to Malaysia, Vietnam, Thailand, Myanmar and Cambodia. Ok let’s stop the excitation! will Tata and Mahindra be the next Toyota or Honda, are Indian manufacturers are really making waves in western markets or is it just media hype? do they have potential to match the mighty Ford’s, Honda’s and Yamaha’s. Hereafter, we will try to cover all the movements of Indian manufacturers in foreign soil!

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Overview 

Tata Motors is the world's fifth largest medium and heavy truck manufacturer and the second largest heavy bus manufacturer. Mr. Tata's 'dream project', the Rs one-lakh car has generated immense interest in the Indian auto market, where Tata's current lowest-priced car is Indica with a tag of Rs 3.3 lakh. The one lakh rupee car is going to be a real car with the basic features.

Nano is in every way a car, with an engine, a suspension, and a steering system designed for its size. The most watched car in the Indian car ...

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Tata Nano. The launch of the People's Car by Tata Motors is a defining moment in the history of India's automotive industry. For Tata Motors, the car - christened the Nano, because it is a small car with high technology - is the next big step in a journey
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