Tata Nano: The People's Car

Nano hypocrisy

admin — Wed, 23 Jan 2008 14:58:02 +0000

The jokes about the Nano, Tata Motors’ new affordable car for the Indian middle class, were harmless, although very old. They told the same jokes about the Fiat 500 and the Citroen 2CV in the 1950s, when mass car ownership first came to Europe. “How do you double the value of a Nano?” “Fill the tank”. “How many engineers does it take to make a Nano?” “Two. One to fold and one to apply the glue”. But the hypocrisy wasn’t funny at all.
The typical story in the Western media began by marvelling that Tata had managed to build a car that would sell for only 100,000 rupees (2,500 US dollars). Everybody agrees that it’s “cute”, and it will take five people provided they don’t all inhale at the same time. It has no radio, no air conditioning, and only one big windshield wiper, but such economies mean that it really is within reach of tens of millions of Indians who could only afford a scooter up to now. And that is where the hypocrisy kicked in.
What will become of us when all those Indians start driving around in cars? There are over a billion of them, and the world just can’t take any more emissions. It’s not the “People’s Car”, as Tata bills it, but rather the “People’s Polluter”, moaned Canada’s National Post. “A few dozen million new cars pumping out pollution in a state of semi-permanent gridlock is hardly what the Kyoto Protocol had in mind”.
But hang on a minute. Aren’t there more than a dozen million cars in Canada already, even though it only has one-thirtieth of India’s population? Aren’t they on average twice the size of the Nano (or, in the case of the larger SUV’s, five times the size)? Does the phrase “double standard” come to mind?
“India’s vehicles spewed 219 million tons of carbon dioxide into the atmosphere in 2005”, fretted The Guardian in London. “Experts say that figure will jump almost sevenfold to 1,470 million tons by 2035 if car travel remains unchecked”. And The Washington Post wrote: “If millions of Indians and Chinese get to have their own cars, the planet is doomed. Suddenly, the cute little Nano starts to look a lot less winning”. But practically every family in the United States and Britain already has its own car (or two).
Don’t they realize how ugly it sounds? Don’t they understand that everybody on the planet has an equal right to own a car, if they can afford it? If the total number of people who can afford cars exceeds the number of cars that the planet can tolerate, then we will just have to work out a rationing system that everybody finds fair, or live with the consequences of exceeding the limits.
“Contraction and convergence” is the phrase they need to learn. It was coined almost twenty years ago by South African-born activist Aubrey Meyer, founder of the Global Commons Institute, and it is still the only plausible way that we might get global agreement on curbing greenhouse gas emissions worldwide.
The notion is simply that we must agree on a figure for total global emissions that cannot be exceeded, rather as we set fishing quotas in order to preserve fish stocks. Then we divide that amount by six and a half billion (the total population of the planet), and that gives us the per capita emission limit for everyone on Earth.
Of course, some people (in the developed countries, mostly) are currently emitting ten or twenty times as much as other people (mainly in the developing countries), but eventually that will have to stop. The big emitters will gradually have to “contract” their per capita emissions, while the poor countries may continue to grow theirs, until at an agreed date some decades in the future the two groups “converge” at the same level of per capita emissions. And that level, by prior agreement, will be low enough that global emissions remain below the danger point.
If you don’t like that idea, then you can go with the alternative: a free-for-all world in which everybody moves towards the level of per capita emissions that now prevails in the developed countries. No negotiations or treaties required: it will happen of its own accord. So will runaway climate change, with average global temperatures as much as six degrees C (10 degrees F) higher by the end of the century. That means a future of famine, war and mass death.
Clucking disapprovingly about mass car ownership in India or China misses the point entirely. At the moment there are only eleven private cars for every thousand Indians. There are 477 cars for every thousand Americans. By mid-century, there will have to be the same number of cars per thousand people for both Indians and Americans — and that number will have to be a lot lower than 477, unless somebody comes up with cars that emit no greenhouse gases at all. Otherwise, everybody loses.

Source: mMorning.com

Learning from Tata’s Nano

admin — Fri, 29 Feb 2008 09:36:54 +0000

The announcement last month by Tata Motors of its newest car, the Nano, was revealing on many levels. The announcement generated extensive coverage and commentary, but just about everyone missed the Nano’s real significance, which goes far beyond the car itself.

But, O.K., let’s start with the car itself — particularly the price. At about $2,500 retail, the Nano is the most inexpensive car in the world. Its closest competitor, the Maruti 800, made in India by Maruti Udyog, sells for roughly twice as much. To put this in perspective, the price of the entire Nano car is roughly equivalent to the price of a DVD player option in a luxury Western car. The low price point has left other auto companies scrambling to catch up.

Thinking Outside the Patent Box

How could Tata Motors make a car so inexpensively? It started by looking at everything from scratch, applying what some analysts have described as “Ghandian 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% 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 (NYSE: GM - news) (GM) 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.

A Modular Design Revolution

But even this broader perspective fails to capture other significant dimensions of innovation. In fact, Tata Motors itself did not draw a lot of attention to what is perhaps the most innovative aspect of the Nano: its modular design. The Nano is constructed of components that can be built and shipped separately to be assembled in a variety of locations. In effect, the Nano is being sold in kits that are distributed, assembled, and serviced by local entrepreneurs.

As Ratan Tata, chairman of the Tata group of companies, observed in an interview with The Times of London: “A bunch of entrepreneurs could establish an assembly operation and Tata Motors would train their people, would oversee their quality assurance and they would become satellite assembly operations for us. So we would create entrepreneurs across the country that would produce the car. We would produce the mass items and ship it to them as kits. That is my idea of dispersing wealth. The service person would be like an insurance agent who would be trained, have a cell phone and scooter and would be assigned to a set of customers.”

In fact, Tata envisions going even further, providing the tools for local mechanics to assemble the car in existing auto shops or even in new garages created to cater to remote rural customers. With the exception of Manjeet Kripalani, BusinessWeek’s India bureau chief, few have focused on this breakthrough element of the Nano innovation [BusinessWeek.com, 1/10/08].

This is part of a broader pattern of innovation emerging in India in a variety of markets, ranging from diesel engines and agricultural products to financial services. While most of the companies pursuing this type of innovation are Indian, the U.S. engineering firm, Cummins (CMI) demonstrates that Western companies can also harness this approach and apply it effectively. In 2000 Cummins (NYSE: CMI - news) designed innovative “gensets” [generation sets] to enter the lower end of the power generator market in India. These modular sets were explicitly designed to lower distribution costs and make it easy for distributors and customers to tailor the product for highly variable customer environments. Using this approach, Cummins captured a leading position in the Indian market and now actively exports these new products to Africa, Latin America, and the Middle East.

“Open Distribution” Innovation

We have called this “open distribution” innovation because it mobilizes large numbers of third parties to reach remote rural consumers, tailor the products and services to more effectively serve their needs, and add value to the core product or service through ancillary services. Three innovations in products and processes come together to support “open distribution:”

– increased modularity [both in products and processes]

– aggressive leveraging of existing third-party, often noncommercial, institutions in rural areas to more effectively reach target customers

– creative use of information technology, carefully integrated with social institutions, to encourage use and deliver even greater value.

Modular designs combined with creative leverage of local third-party institutions help participants to get better faster. Companies such as Tata and Cummins are going far beyond “customer co-creation” in the narrow sense of soliciting isolated ideas from customers. Instead, they are building long-term personal relationships with customers, enriched by the specialized capabilities of broad networks of third parties that generate much deeper insight into customer needs and afford opportunities to tailor value.

Such innovations are quite different from those in the retail distribution systems pioneered by companies such as Dell (DELL (NASDAQ: DELL - news) ) and the leading big-box retailers. These U.S. companies developed completely self-contained and highly standardized facilities and services for customers. But the open-architecture approach pioneered by Indian companies may offer much greater opportunity to deliver more tailored value to customers than the closed-architecture U.S. approach. The techniques initially developed to reach poor and rural customers may have even greater potential when used to reach highly demanding, affluent, urban customers in Western economies.

Welcoming Users Back into the Design Loop

The Tata Motors/Nano approach contrasts with the strategy of most other manufacturers. For more established automakers each new model represents an advance in tight integration, with more and more of the functionality deeply embedded in electronics that truly represent a “black box” to the customer. The days of customizing cars to personalize them and push their performance limits are rapidly receding into distant memory for the average customer. Yet, as Kathleen Franz, makes clear in her wonderful book, Tinkering: Consumers Reinvent the Early Automobile, it was the open design of early automobile models that blurred the lines between consumption and invention and led to a wave of innovations that were later embraced by the auto industry.

What are the broader lessons that Western executives should learn from this innovation story?

Emerging markets are a fertile ground for innovation. The challenge of reaching dispersed, low-income consumers in emerging markets often spurs significant innovation. Western executives should be careful about compartmentalizing the impact of these innovations on the edge of the global economy. As we suggested in Innovation Blowback, these innovations will become the basis for “attacker” strategies that can be used to challenge incumbents in more developed economies. What’s initially on the edge soon comes to the core.

– Find ways to help customers and others on the edge to tinker with your products. Modular and open product designs help engage large numbers of motivated users in tailoring and pushing the performance boundaries of your products, leading to significant insight into unmet customer needs and creative approaches to addressing those needs.

– Pay attention to institutional innovation. Western executives often become too narrowly focused on product or process innovation. Far higher returns may come from investing in institutional innovation — redefining the roles and relationships that bring together independent entities to deliver more value to the market. Tata is innovating in all three dimensions simultaneously.

– Rethink distribution models. In our relentless quest for operating efficiency, we have gone for more standardization and fewer business partners in our efforts to reach customers. As customers gain more power, they will demand more tailoring and value-added service to meet their needs. Companies that innovate on this dimension are likely to be richly rewarded.

Source: Yahoo

India’s Tatas provide 65,000 new books to poor kids in US

admin — Fri, 29 Feb 2008 09:33:28 +0000

India’s Tata Group that grabbed global attention with their $2,500 Nano car, has joined First Book, a non-profit organisation, in a programme to distribute 65,000 new books to children from low-income families across the United States.

Second grade students from Dodge Park Elementary School in Maryland were the first students to receive brand-new books Wednesday with the support of the Tata Group North America.

The students participated in reading circles with Tata Company representatives to celebrate First Book’s mission to provide new books to disadvantaged children.

“First Book is tremendously grateful for the generous support of The Tata Group and its companies, which will help to share the joy of reading and learning with thousands of children in need across the United States,” said Kyle Zimmer, president of First Book.

“Through the magic of books, First Book and The Tata Group are helping children to discover new worlds and realize brighter futures.”

“The Tata Group has a long heritage of focussing on education in the communities in which it operates. We believe that doing good is doing good business — and this is a good example of how we use our resources constructively to invest in future generations,” said David Good, chief representative, the Tata Group North America.

“The Tata Group is proud that so many of our companies have pooled their resources and attention to make a difference in the education of so many children.”

First Book, a non-profit organization with the mission to give children from low-income families the opportunity to read and own their first new books, has provided more than 50 million new books to children in need in thousands of communities in the US.

As the largest India-headquartered multinational in North America, Tata has more than 80 offices in the US and Canada and more than 15,000 employees.

With more than 60 years of experience in North America and a century of leadership in India, Tata Group companies generate more than $25 billion in annual revenues and employ more than a quarter million people across 85countries and six continents.

Source: New Kerala

Canadian components for Nano

admin — Fri, 29 Feb 2008 09:28:54 +0000

Canada’s Samco Machinery Ltd will supply six auto components for the world’s cheapest car Tata Nano, the company’s Chief Executive Joe Repovs has said.

The Toronto-based roll forming system manufacturer would supply equipment for the chassis components of the Nano under a USD 3 million deal signed between Samco and Tata Ryerson Ltd.

“Waiting for the world to come to us was not an option. We wanted to diversify and expand our markets so we had to go out to the world,” said Repovs.

Ontario Minister of Small Business and Entrepreneurship Harinder Takhar, who toured Samco’s manufacturing facility on Monday, said: “Samco is an excellent example of a small enterprise reaching out and winning contracts with global partners.”

“Congratulations to Samco on pursuing and securing a global partnership,” said Brad Duguid, Ontario Minister of Labour.

“We applaud their efforts and encourage other Ontario companies to follow in their direction to keep Ontario competitive on the global stage,” he said.

Subir Khasnovis, Vice President of Engineering of Tata Ryerson, said “I have no doubts in my mind that the Tata Ryerson-Samco partnership will find many opportunities to work together in the future.”

Tata Ryerson is a 50-50 joint venture between Tata Steel, India and Ryerson Tull, USA.

Source: Times of India

Tata plans thriftier Nano for Europe in four years

admin — Tue, 12 Feb 2008 22:34:13 +0000

Munich: Indian carmaker Tata Motors plans to launch a second, thriftier version of its low-cost car Nano in the next four years in Europe, the project chief has told the German magazine Focus.

“We will develop a follow-on model in four years that will fulfil the Euro 5 emissions standard and pass European crash tests,” head of the Tata Nano project Girish Wagh said.

Focus released a German version of his remarks in Munich Sunday, a day before the magazine goes on sale.

Wagh said the principal objective was to reduce the Nano’s fuel consumption.

The first generation of the car, set to sell for about $2,500, will be relatively thirsty, using five litres of petrol to go 100 km.

“We are not satisfied with that,” Wagh said. Tata had set its engineers a target fuel consumption of three litres for the distance. Focus said Tata Motors was ultimately planning to make 1 million Nano cars per year.

Source: Silicon India

Nano may arrive at your doorstep soon

admin — Sun, 20 Jan 2008 13:18:30 +0000

If you could not make it to the 9th auto expo here and missed the opportunity to see the cheapest car in the world, take heart as the Nano will soon travel to your state, courtesy Tata Motors.
So no matter if it’s Manipur in the east or Gujarat in the west, Kashmir in the north and Tamil Nadu in the south, the small wonder will soon be among the people it has been made for ~ the common man. Tata plans to showcase the Nano in special displays of the car across the country.
It will also clear the ‘myths’ about safety and environment issues related to it and promote it. Tata Motors plans to complete the display of the car in different parts of the country before it hits the market later this year probably in October. Tata Motors has already started its initiative to receive people’s feedback on the car and has engaged a private firm to collect response from the general public at Auto-Expo 2008, which will be utilised for incorporation of new features and improvement of existing ones at the same price.
According to company officials at Tata Motors, security agencies and Society of Indian Automobile Makers, the stall where Nano cars were on display at the auto expo was visited by over one lakh visitors every day during the seven-day international event. “Tata Motors products have always been appreciated by the general public at various forums. In past auto expos, we have been witnessing more footfall as compared to other auto players. However, this year, as the Nano was on display, it has broken all previous records. With this overwhelming response, we contemplate to display it in various cities all across the country,” said Mr Debasis Ray of Tata Motors. Some changes might be made in the existing features of the Nano. However, those changes will be very minor as the Tata Motors has to present the car within one lakh price. “ We have engaged a private firm to get public response and suggestions on improvement of the product. Later, they will be analysed. May be a few of them are incorporated in it. Most probably the Nano will have more colours that we have displayed here,” said Mr Ray. However, those who wish to book the car in advance will have to wait for some time.

Source: The Statesman

Low-income group be given preference to book Nano: BJP

admin — Sun, 20 Jan 2008 13:11:52 +0000

Tatas should ensure that low-income people are given a preference in bookings for the Rs one lakh car Nano to prevent the richer strata from grabbing the cheapest car from the word go, a senior BJP leader said.

Apprehending black marketing of the Nano by ‘rich agents’, BJP national secretary Vijay Goel asked Ratan Tata to give preference to lower income group while making bookings for the car whenever it is ready for a commercial launch.

In a letter written to Ratan Tata, who is the chairman of Tata motors, Goel said precautionary measures should be taken while booking the car in order to avoid black marketing or hoarding.

“My fear is that at the time of booking, it is possible that the richer agents of the black market may book the car or even someone who can afford a bigger one may block the car from reaching the target consumer,” the former union minister said.

To prevent the same, it would be a great idea to take some precautionary measures and give some preference to those who come from a lower-income group, he added.

He said asking for income tax return or some other proof at the time of booking could help in identifying the income class of the consumer.

Tata Motors on January 10 had unveiled its much-awaited small car, which has been positioned as an affordable personal mode of transport for the family, which travels on two - wheelers.

The cheapest car in the world ‘Tata Nano’, which caught the fancy of people during the 9th auto expo, will be commercially launched in the second quarter of this fiscal. It has inspired many global companies, including Renault and Hyundai, to plan low- cost cars for the Indian market.

Source: Zee News

Tata Nano will force others to innovate

admin — Sat, 19 Jan 2008 15:15:21 +0000

Nano, the world’s cheapest passenger car at $2,500 from Tata Motors, will force others to innovate and bring down their prices, said Tamil Nadu Chief Minister M. Karunanidhi.

Inaugurating a conference here of entrepreneurs organised by the Indus Entrepreneurs, Chennai Chapter, the chief minister Friday said India has strength in innovation and the Tata Nano was an example of it.

“The Tamil Nadu government will provide financial assistance to foster innovative projects,” he said.

Referring to his government’s free television scheme that is drawing flak from some quarters, Karunanidhi said: “I want the younger generation to look beyond their huts and villages, and progress. Television is the window to the world.”

He said his government has signed 11 memoranda of understanding (MoUs) for investments worth Rs.110 billion ($2.8 billion) in the past 20 months.

Speaking at the function, his daughter and parliament member M.K. Kanimozhi, who is convener, Chennai Sangamam, said it was important to reach out to entrepreneurs and give them necessary recognition.

Source: DNA India

Sibal wants future cities planned on `Nano` principles

admin — Sat, 19 Jan 2008 15:14:27 +0000

Tata’s dream project — Nano — has an admirer in Science and Technology Minister Kapil Sibal who wants urban planners to develop cities on the principles of affordability, world-class quality and technology.

Congratulating Tata Motors for making the “world-class” car for the common man, Sibal said cities in India should also be developed on the lines of “Tata’s mantra of affordability, world-class quality and technology”.

“The mantra of Nano is accessibility, affordability and world-class quality and technology and our cities should be developed in such a way,” Sibal said, giving away awards of “Future Cities India 2020″ competition here.

“Nano is not just a car. It is small and represents the ordinary man, who dreamed of taking his family in a car and Tatas had made it possible. Ordinary people can now afford a car which is affordable, stylish which also represents world-class technology,” he said.

“Transportation in the cities in future should be affordable and accessible for the poor and it should be of a world-class quality,” he said.

Source: Zee News

Nano makes it to Time’s most important cars of all time

admin — Fri, 18 Jan 2008 10:01:08 +0000

One week after its unveiling, the world’s media is still agog with news and views about the Tata Nano. Many termed it a cute, ultra-cheap car that will revolutionise personal transportation in India and Asia and many others are calling it a glorified go-kart that will be unreliable and unsafe.

The debate is still raging in all sorts of media - print, TV and the Internet.

Online polls that ask Americans if they will buy one if and when the Nano is launched in that market, blogs that have postings, which swing from patriotic praise to outright hatred and discussion forums that are still witness to heated arguments about the promise and fallout of the car are keeping the Tata car in the thick of it all. The Nano has probably got more media attention than it bargained for. But, it was only to be expected with the Nano’s much-publicised price tag making it the cheapest car of the world.

Competitors who have in the past sworn that it is an impossibility to develop a $2,500 car have reacted to the Nano as far away as Detroit – the home of the American automobile industry.

At the North American International Auto Show, which is currently on at Detroit, the hot car being discussed was the Nano, where it is not even on display.

Interestingly, the notoriously taciturn, Toyota Motor Corporation and its President, Mr Katsuaki Watanabe, also reacted to the Nano saying that the world’s number two car maker will need a little more time to develop vehicles at this kind of price point. It is reported that he also added that an early prototype of a Toyota small car that will be made specifically for markets such as India is close to getting a “go sign”.

In the midst of all this attention that the Nano is still getting, comes one of the first recognitions of its potential to create history.

In a presentation titled ‘The dozen most important cars of all time starting from 1908 to the present’, Time magazine lists the Tata Nano along with legendary cars like the Ford Model T, the Volkswagen Beetle, Chevy Belair, Toyota Corolla, the Mini and the Honda Civic.

Listing the 12 cars in chronological order, the Time magazine presentation says only these ‘few automobiles have been able to fundamentally change the way we live and dream’. As for the Nano, Time says “India’s ‘people’s car’, as it is already dubbed, is intended to put motoring within reach of Asia’s masses.

At $2,500 it’s hard to see it how it won’t sell, but even if it doesn’t it will become the poster car for a new, stripped-back style of engineering — glue instead of welds! — that could change the world.”