Tata Nano – the most amazing thing to have happened to auto industry!

All through the post medieval history, any technological advancement has caught human attention – be it Wright Brother’s first flight, invention of internal combustion engine, the first super computer, the discovery of antibiotics, the decoding of human DNA – needless to say, one theme links it all - “technological advancement’. Lately, a new dimension to ‘innovation’ has emerged. Over the past decade or so, ‘cost’ and ‘affordability’ have started to drive changes. A lot of changes are now focused on bringing on redesigned products at much lower cost – be it the $100 laptop, a low-cost mobile phone or an ultra-cheap car. Yes, this post is about Tata Nano, priced at Rs. 1-Lakh or $2,500, it has halved the entry price for a car.

Ever since Mr. Ratan Tata first declared in public to manufacture the 1-lakh car, I have nearly followed every possible news article on this car. To me, this is the most amazing thing to have happened to auto industry, particularly for developing economies and will possibly impact entry level sedan segment world over. Before going in to details of the car and its impact, let me provide the views of a distant observer, from the day the plan became public (~4 years back) till today (just after the official launch of the car)

• Announcement of 1-lakh car project (~4 years back): I thought “hmmm… interesting, but not sure if they can pull it off” I was excited, but didn’t have too much confidence if this would be ever possible!

• My first impression: As more information started to come in, I thought this car would be without doors, possibly with a basic 2-wheeler engine and suspension system, possibly a cloth cover on top instead of a metal roof, no dashboard panel, wooden seats – in short, a car, but possibly not meeting the basic safety requirements and comfort

• My first inference: But even with the above description, 1-lakh car seemed attractive – it would be the same value for money that a Maruti 800 is at Rs. 2 Lakhs. It might have been a success, but Tata would have probably struggled to sell half a million units a year

• At the half way stage: Once Tata announced that it would indeed be a “proper car”, with a cute design, I really got excited about it. For this was not cost cutting, but a complete new invention of "traditional car". In one of the recent interviews, team at Tata Motors described their experience working on 1-lakh car – “we worked towards cutting almost 50-60% of costs for most parts”. Kudos to the team and the leadership – they would have pushed for 1-lakh price tag from seemingly impossible situations at many stages all through the development of this car

• The day before the official launch: The day before the Auto Expo Launch, I was betting my money on the following specifications – a price tag of 1.25 lakh, a boxy design, high proportion of plastics esp. with doors, a basic rear engine not meeting environment norms, two doors with seats folding to access the rear seats, etc

• Tata Nano launch: … and then, you get to see a much better car than a Maruti-800, meeting Euro-IV emission norms (I think engine sensors are a must for this), a killer design, plenty of space to seat 4-5 people, etc, etc – in short, a super car! In my books, if I was to benchmark this car with existing models on the road, it is worth at least Rs. 2 Lakhs

… well, at price tag of Rs 1.Lakh, it is a killer product! A pure market share eater!

Congratulations again to the team at Tata Motors, they have really redefined car designing and manufacturing. With the success that Tata Indica and other models have been, I am confident Tata has the operational capability to put the design to assembly line and manage the entire supply chain from suppliers to dealers producing a consistent good quality product. A big thanks to Tata Motors Team!