The breakthrough innovations of the $2,500 Nano car carry a lot of important lessons for Western executives
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 (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 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:"
o increased modularity (both in products and processes)
o aggressive leveraging of existing third-party, often noncommercial, institutions in rural areas to more effectively reach target customers
o 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) 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.
o 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.
o 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.
o 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.
John Hagel and John Seely Brown are co-chairman and independent co-chairman, respectively, of the Center for Edge Innovation, a part of Deloitte & Touche USA LLP. John Hagel writes a blog at Edge Perspectives .
Showing posts with label news. Show all posts
Showing posts with label news. Show all posts
A cobbler form Mumbai gets Nano
Maruti Bhandari, the celebrated Mumbai cobbler who booked the top-end Tata Nano by paying a cheque of Rs 1.4 lakh in April, is one of the one lakh allottees of the car.
“I am absolutely elated. It is a moment of pride,” he said on a day when television channels were trying to interview him.
Bhandari, who lives in a Mumbai suburb, had been saving money to buy a motorcycle. However, the idea of an inexpensive people’s car caught his fancy and he ended up zeroing in on the Nano.
He paid the entire booking amount from his savings at the Concorde outlet, a Tata Motors’ showroom in the city. Bhandari is expected to get the car within a few weeks when deliveries begin.
The Nano was designed for people like him who could afford the car and fulfil an aspiration in the process. “Mera family ko ghumane le jaunga (I will take my family around),” he said.
Bhandari lives in a small home with his wife and two sons. “Buying the Nano is a dream comes true,” he said. Asked if he was concerned about the imminent petrol price hike, he replied, “Yes, but we have to somehow run the car.”
“I am absolutely elated. It is a moment of pride,” he said on a day when television channels were trying to interview him.
Bhandari, who lives in a Mumbai suburb, had been saving money to buy a motorcycle. However, the idea of an inexpensive people’s car caught his fancy and he ended up zeroing in on the Nano.
He paid the entire booking amount from his savings at the Concorde outlet, a Tata Motors’ showroom in the city. Bhandari is expected to get the car within a few weeks when deliveries begin.
The Nano was designed for people like him who could afford the car and fulfil an aspiration in the process. “Mera family ko ghumane le jaunga (I will take my family around),” he said.
Bhandari lives in a small home with his wife and two sons. “Buying the Nano is a dream comes true,” he said. Asked if he was concerned about the imminent petrol price hike, he replied, “Yes, but we have to somehow run the car.”
Tata Nano delivery to start next month
Tata Motors has completed random selection of the first 100,000 applicants who would buy the Nano small car in the first phase and that delivery will begin next month.
"Tata Motors once again places on record its gratitude to the people of India for according such a warm welcome to the Tata Nano, as also to all its preferred financiers, dealers and partner companies for their stupendous effort in helping the company launch the Tata Nano," the company said in a statement.
The selection was made through a random computerised process after bookings closed on April 25.
About two lakh bookings, which began April 9, were made across Tata Motors dealerships and State Bank of India (SBI) branches. This was, however, much lower than what was expected.
The selected applicants will be contacted individually, the statement said, adding that delivery will begin next month and continue till the last quarter of 2010.
India's third largest passenger car maker said 55,021 applicants out of the 106,703 not selected in the first phase had exercised the option to retain their booking.
They will be given preferential allotment in the second phase.
Additionally, they will be entitled to an interest of 8.5 per cent on the booking amount if the car is delivered within two years (June 23, 2011), and 8.75 per cent after that date. The booking amounts of the unsuccessful applicants shall be returned, the statement added.
The company will also be offering the unsuccessful applicants "an exciting offer on the Tata Indica range", the statement read.
"Tata Motors once again places on record its gratitude to the people of India for according such a warm welcome to the Tata Nano, as also to all its preferred financiers, dealers and partner companies for their stupendous effort in helping the company launch the Tata Nano," the company said in a statement.
The selection was made through a random computerised process after bookings closed on April 25.
About two lakh bookings, which began April 9, were made across Tata Motors dealerships and State Bank of India (SBI) branches. This was, however, much lower than what was expected.
The selected applicants will be contacted individually, the statement said, adding that delivery will begin next month and continue till the last quarter of 2010.
India's third largest passenger car maker said 55,021 applicants out of the 106,703 not selected in the first phase had exercised the option to retain their booking.
They will be given preferential allotment in the second phase.
Additionally, they will be entitled to an interest of 8.5 per cent on the booking amount if the car is delivered within two years (June 23, 2011), and 8.75 per cent after that date. The booking amounts of the unsuccessful applicants shall be returned, the statement added.
The company will also be offering the unsuccessful applicants "an exciting offer on the Tata Indica range", the statement read.
Car majors tread digital marketing route to rope in tech-savvy buyers
After the rural market rejuvenated car sales, auto companies are now building on digital marketing activities to tap onto a new set of tech savvy customers. The strategy is to generate business through consumer interface over internet and mobile phones, say auto marketers.
Maruti claims over a lakh cars it sold last year originated from digital marketing initiatives while Tata Motors saw 4,000 customers booking its low-cost car Nano over the internet. Other automakers are also witnessing a similar response on their digital platforms.
Honda’s third generation of flagship car, City, regained its leadership position in the mid-size car segment in the first month of its launch in November on the back of strong digital interface with customers. Not to be left behind, Volkswagen is using Net and mobile to tap the 2.5-lakh strong customer base in India, owning cars over Rs 10 lakh, for its Jetta and Passat premium sedans.
Passenger carmaker leader Maruti Suzuki India (MSI) first tasted success with online marketing with its small car A-Star , which generated huge interest on the net with over 2.5 lakh online hits. “We sold around 4,000 A-Stars based on customer interface on internet and have doubled online marketing activity for the new hatchback Ritz with a microsite launched a week ahead of the launch and offering various exclusive options to loggers.
Around 17-18 % of our sales now are estimated to originate from digital marketing from mere 2-3 % in 2005,” MSI chief general manager (marketing) Shashank Srivastava said.
Other carmakers are also actively tapping the interactive social networking sites and blogs on the web advertising space.
Honda is launching a new programme in July to track sales originating from net. “Our cars are primarily targeted at rich and younger customer who are net savvy and take keen interest in blogs and different web activities. Digital marketing helps us build a strong brand,” Honda Siel Cars veep (sales & marketing) Jnaneshwar Sen said. He added that preliminary estimates suggest internet is responsible for 5% of Honda’s total sales in India.
Earlier, Tata Motors’ dedicate website on Nano got a little over 30-million hits from the date of launch of the car to the closure of the booking. “Its easier to reach professional like doctors, engineers and chartered accountants and other target audience with a strong influence on their purchase decision,” said Amardeep Bajpai of Webisdom, an internet marketing solution company.
Maruti claims over a lakh cars it sold last year originated from digital marketing initiatives while Tata Motors saw 4,000 customers booking its low-cost car Nano over the internet. Other automakers are also witnessing a similar response on their digital platforms.
Honda’s third generation of flagship car, City, regained its leadership position in the mid-size car segment in the first month of its launch in November on the back of strong digital interface with customers. Not to be left behind, Volkswagen is using Net and mobile to tap the 2.5-lakh strong customer base in India, owning cars over Rs 10 lakh, for its Jetta and Passat premium sedans.
Passenger carmaker leader Maruti Suzuki India (MSI) first tasted success with online marketing with its small car A-Star , which generated huge interest on the net with over 2.5 lakh online hits. “We sold around 4,000 A-Stars based on customer interface on internet and have doubled online marketing activity for the new hatchback Ritz with a microsite launched a week ahead of the launch and offering various exclusive options to loggers.
Around 17-18 % of our sales now are estimated to originate from digital marketing from mere 2-3 % in 2005,” MSI chief general manager (marketing) Shashank Srivastava said.
Other carmakers are also actively tapping the interactive social networking sites and blogs on the web advertising space.
Honda is launching a new programme in July to track sales originating from net. “Our cars are primarily targeted at rich and younger customer who are net savvy and take keen interest in blogs and different web activities. Digital marketing helps us build a strong brand,” Honda Siel Cars veep (sales & marketing) Jnaneshwar Sen said. He added that preliminary estimates suggest internet is responsible for 5% of Honda’s total sales in India.
Earlier, Tata Motors’ dedicate website on Nano got a little over 30-million hits from the date of launch of the car to the closure of the booking. “Its easier to reach professional like doctors, engineers and chartered accountants and other target audience with a strong influence on their purchase decision,” said Amardeep Bajpai of Webisdom, an internet marketing solution company.
Tata to Announce 1 Million Reservations for Nano in India
Tata Motors Ltd., the largest manufacturer of trucks in India and innovator of the soon-to-be available Tata Nano, is set announce the number of reservations it has received the world's cheapest car.
According to newspaper reports, the Tata may have received as many as one million orders for the estimated $2,000 vehicle. The official announcement is expected April 28.
Tata allowed reservations for the Tata between April 9-25. Orders won't be completed for more than a year and the automaker is guaranteeing the initial price of the car for only the first 10,000 vehicles sold.
Conceived in 2003, discussed for several years and six months delayed from its originally scheduled debut, the Tata Nano specifications are unique: It's a four-door, five-seat, 10-foot automobile with a 2-cylinder, 33-horsepower, 624cc engine.
It will have a five-speed (four forward) manual transmission. Buyers are first expected to take delivery in July.
Priced at 100,000 rupees (approximately $1,950), the base model Nano is available in red, yellow and silver and does not include airbags, air conditioning or power steering.
According to newspaper reports, the Tata may have received as many as one million orders for the estimated $2,000 vehicle. The official announcement is expected April 28.
Tata allowed reservations for the Tata between April 9-25. Orders won't be completed for more than a year and the automaker is guaranteeing the initial price of the car for only the first 10,000 vehicles sold.
Conceived in 2003, discussed for several years and six months delayed from its originally scheduled debut, the Tata Nano specifications are unique: It's a four-door, five-seat, 10-foot automobile with a 2-cylinder, 33-horsepower, 624cc engine.
It will have a five-speed (four forward) manual transmission. Buyers are first expected to take delivery in July.
Priced at 100,000 rupees (approximately $1,950), the base model Nano is available in red, yellow and silver and does not include airbags, air conditioning or power steering.
Tata Motors to introduce A Car That Runs on Air
Tata Motors is taking giant strides and making history for itself. First the Landrover-Jaguar deal, then the world's cheapest car and now it is also set to introduce the car that runs on air, compressed air to be specific.
In 2007, Tata Motors licensed the rights from MDI for $28 million to build and sell Tata-branded air cars in India. Tata has not confirmed if it will build one of the MDI prototype cars or, more likely, install the MDI technology in one of its existing cars like the light weight Nano (shown here). The Nano is Tata's $2,500 "scooter replacement" people's car that recently made headlines. While sought after in developing countries, this inexpensive car clearly won't meet federal emissions and safety requirements in the U.S. and other regulated markets around the world. Still, the addition of air power to an already inexpensive and efficient model would be quite appealing in the Indian market and others where fundamental transportation is in demand, and air pollution could be a serious challenge as exponentially greater numbers of vehicles make their way to the highway.
With fuel prices touching nearly $150 per barrel, it is about time we heard some breakthrough! India's largest automaker Tata Motors is set to start producing the world's first commercial air-powered vehicle. The Air Car, developed by ex-Formula
One engineer Guy ½gre for Luxembourg-based MDI, uses compressed air, as opposed to the gas-and-oxygen explosions of internal-combustion models, to push its engine's pistons. Some 6000 zero-emissions Air Cars are scheduled to hit Indian streets by August of 2009.
The Air Car, called the MiniCAT could cost around Rs. 3,50,000 ($ 8177) in India and would have a range of around 300 km between refuels.
The cost of a refill would be about Rs. 85 ($ 2). Tata motors also plans to launch the world's cheapest car, Tata Nano priced famously at One lakh rupees.
The MiniCAT which is a simple, light urban car, with a tubular chassis that is glued not welded and a body of fiberglass powered by compressed air. Microcontrollers are used in every device in the car, so one tiny radio transmitter sends instructions to the lights, indicators etc. There are no keys - just an access card which can be read by the car from
your pocket. According to the designers, it costs less than 50 rupees per 100Km (about a tenth that of a petrol car). Its mileage is about double that of the most advanced electric car (200 to 300 km or 10 hours of driving), a factor which makes a perfect choice in cities where the 80% of motorists drive at less than 60Km. The car has a top speed of 105 kmph. Refilling the car will, once the market develops, take place at adapted petrol stations to administer compressed air. In two or three minutes, and at a cost of approximately 100 rupees, the car will be ready to go another 200-300 kilometers.
As a viable alternative, the car carries a small compressor which can be connected to the mains (220V or 380V) and refill the tank in 3-4 hours. Due to the absence of combustion and, consequently, of residues, changing the oil (1 litre of vegetable oil) is necessary only every 50,000Km.] The temperature of the clean air expelled by the exhaust pipe is between 0-15 degrees below zero, which makes it suitable for use by the internal air conditioning system with no need for gases or loss of power
In 2007, Tata Motors licensed the rights from MDI for $28 million to build and sell Tata-branded air cars in India. Tata has not confirmed if it will build one of the MDI prototype cars or, more likely, install the MDI technology in one of its existing cars like the light weight Nano (shown here). The Nano is Tata's $2,500 "scooter replacement" people's car that recently made headlines. While sought after in developing countries, this inexpensive car clearly won't meet federal emissions and safety requirements in the U.S. and other regulated markets around the world. Still, the addition of air power to an already inexpensive and efficient model would be quite appealing in the Indian market and others where fundamental transportation is in demand, and air pollution could be a serious challenge as exponentially greater numbers of vehicles make their way to the highway.
With fuel prices touching nearly $150 per barrel, it is about time we heard some breakthrough! India's largest automaker Tata Motors is set to start producing the world's first commercial air-powered vehicle. The Air Car, developed by ex-Formula
One engineer Guy ½gre for Luxembourg-based MDI, uses compressed air, as opposed to the gas-and-oxygen explosions of internal-combustion models, to push its engine's pistons. Some 6000 zero-emissions Air Cars are scheduled to hit Indian streets by August of 2009.
The Air Car, called the MiniCAT could cost around Rs. 3,50,000 ($ 8177) in India and would have a range of around 300 km between refuels.
The cost of a refill would be about Rs. 85 ($ 2). Tata motors also plans to launch the world's cheapest car, Tata Nano priced famously at One lakh rupees.
The MiniCAT which is a simple, light urban car, with a tubular chassis that is glued not welded and a body of fiberglass powered by compressed air. Microcontrollers are used in every device in the car, so one tiny radio transmitter sends instructions to the lights, indicators etc. There are no keys - just an access card which can be read by the car from
your pocket. According to the designers, it costs less than 50 rupees per 100Km (about a tenth that of a petrol car). Its mileage is about double that of the most advanced electric car (200 to 300 km or 10 hours of driving), a factor which makes a perfect choice in cities where the 80% of motorists drive at less than 60Km. The car has a top speed of 105 kmph. Refilling the car will, once the market develops, take place at adapted petrol stations to administer compressed air. In two or three minutes, and at a cost of approximately 100 rupees, the car will be ready to go another 200-300 kilometers.
As a viable alternative, the car carries a small compressor which can be connected to the mains (220V or 380V) and refill the tank in 3-4 hours. Due to the absence of combustion and, consequently, of residues, changing the oil (1 litre of vegetable oil) is necessary only every 50,000Km.] The temperature of the clean air expelled by the exhaust pipe is between 0-15 degrees below zero, which makes it suitable for use by the internal air conditioning system with no need for gases or loss of power
Nano Bulk Orders Placed as Company Incentive by firm
Nano fever has gripped the corporate world as well. Companies like Shree Cement, Linc Pen have placed bulk orders for Nano. These Nanos will be offered to employees as an incentive or as rewards for their performance.
Shree Cement has booked 1000 Nano cars attributing fuel efficiency as its main reason rather than the price factor. “I decided to book Nano not because it is a cheap car but due to its fuel efficiency. We want to burn minimum fuel. I too intend to leave my golden silver BMW and ride the first Nano which drives into our office. Of the total 1,000 cars booked, we hope to get about 200 cars between July 2009 and June 2010. The balance 800 cars will be allotted to us later.” “The cars will be given to the employees as part of the company’s HR strategy,” said Shree Cement managing director HM Bangur. The company intends to upgrade employees’ two wheeler allowances and the employees will have to fulfill Nano eligibility criteria to get the cars as incentive.
The IT sector has been hit by recession and the IT employees have also taken their preference towards Nano model. Linc Pen is the second company that has placed order for 11 Nano cars for its employees.
Submitted by Satish Kalepu
Source:cartradeindia
Shree Cement has booked 1000 Nano cars attributing fuel efficiency as its main reason rather than the price factor. “I decided to book Nano not because it is a cheap car but due to its fuel efficiency. We want to burn minimum fuel. I too intend to leave my golden silver BMW and ride the first Nano which drives into our office. Of the total 1,000 cars booked, we hope to get about 200 cars between July 2009 and June 2010. The balance 800 cars will be allotted to us later.” “The cars will be given to the employees as part of the company’s HR strategy,” said Shree Cement managing director HM Bangur. The company intends to upgrade employees’ two wheeler allowances and the employees will have to fulfill Nano eligibility criteria to get the cars as incentive.
The IT sector has been hit by recession and the IT employees have also taken their preference towards Nano model. Linc Pen is the second company that has placed order for 11 Nano cars for its employees.
Submitted by Satish Kalepu
Source:cartradeindia
Ratan Tata and His Dream Machine
Ratan Tata, a shock of grey on his head, a grim look on his face, shuns the limelight. But on Thursday, the industry patriarch perhaps did not mind the thousands of flashbulbs that popped in his face as the world took its first look at an astonishing Tata product: the Nano. His usual taciturn expression gave way to a smile as he threw a repartee at the environmentalists for their worries that the Rs 1 lakh "people's car" would add to India's emission woes.
Ratan Tata's quiet moment of triumph was deserved. Despite being born to luxury, he had felt for the Indian family, riding four to a bike. Their dream machine-his dream machine-was here now, having weathered the odds and the critics' pessimism. To top it, there came news that the Government had allocated spectrum to his companies to operate GSM mobile services, a moment that harkened back to bitter wrangling with established GSM players.
The initial response to the Nano has been overwhelming and the tiny, Noddy-land car is expected to help the company cross several milestones. With revenues at Rs 1,29,994 crore for the financial year 2006-7, and group companies enjoying a market capitalisation of Rs 2,51,487 crore as on January 10, 2008, the Tata Group is on a strong footing, contributing more than 3 per cent to India's GDP. Nano, being the world's cheapest car, has made international players sit up in amazement and the company has received proposals from some African, Latin American and Southeast Asian countries to manufacture the car there.
The Nano will make millions of Indians mobile. But then, that has always been a Tata speciality: over the 138 years of the company's existence, it has been helping India propel itself forward. It is emblematic of the company's own recent push to become a proactive corporate mover, not the stolid doer it had been for generations. The acquisition of Tetley in 2000, the takeover of Corus to become the fifth largest steel company in the world and upping its stakes to become the frontrunner in acquiring the Jaguar and Land Rover brands from Ford, all make a statement for Tata as a company on the move.
When Tata Tea bought Tetley, it made big news as Tetley was a much bigger company. Similarly when Tata Steel took over Corus, it did so without a hint of corporate bashfulness. When Tata Tea bought 30 per cent stake in Glaceau, it was looking for the international marketing acumen of the company to leverage for Tata Tea. But then with another company acquiring the majority stake in Glaceau, Tata was left with no option than to book the gains of its investment in Glaceau. But there was still a footnote to the episode and it stated that the Tata Group was aggressive about going global.
The importance that the economic community puts on the Tatas is evident from the fact that three group companies form a part of the Sensex, the most to represent a corporate. RDAG (Reliance Dhirubhai Ambani Group) is represented by two companies in the benchmark stock market index. The combined weightage of the market cap of the three companies in the Sensex is 6.4 per cent. Tata has 13 other listed companies, excluding the three, that are a part of the Sensex.
The future of the group will be defined by some of its flagship listed companies-TCS, Tata Steel, Tata Motors, Tata Power, Tata Teleservices and by Tata's venture into financial services with Tata Capital. In the current market scenario, not only does Tata Motors stand tall after the Nano, but Tata Steel, on the back of growing demand for steel and rising metal prices, is also strongly positioned.
Power is the buzzword in Tata circles these days. Tata Motors has bagged the Mundra Ultra Mega Power Project and there are other projects to be undertaken by the company. As for its finance company, the entity Tata Capital has three companies within it, Tata AMC, Tata AIG Insurance and Tata Investment Corporation. As and when Tata Capital gets listed, it will unlock a lot of value for the company.
How the company moves ahead will depend a lot on who takes over from Ratan Tata, a bachelor. Retirement, though, is not what is preoccupying Ratan Tata's mind. In fact, he has another dream-for himself and his countrymen: availability of clean drinking water. He has already put his scientists on the job of finding the cheapest method of purifying water for drinking.
The company has had a strong inheritance line and that has been an important aspect in the continuous evolution and growth of the company. Ever since Jamsetji Tata established the first textile unit in 1870, the company has rigorously moved ahead. Dorab Tata established Tata Steel and Tata Power and took the Tatas into new segments of operation. Then came the aviation pioneer JRD Tata, who brought commercial aviation to India under the name Tata Airlines, later nationalised into what became Air-India. He also has to his credit the tea business, hotels, trucks and locomotives, among others.
The latest in the line of Tata patriarchs, Ratan Tata has not proved less than his predecessors. He was instrumental in producing India's first indigenously designed and manufactured car, the Tata Indica, a new version of which was released a day before sibling Nano took centrestage. He has shown the aggressive face of the Tatas-as the acquisitions that it has gone for and successfully completed. And now he has delivered on his promise of launching the world's cheapest car. While Ratan Tata is around, surely there will be little talk of a successor.
SUMANT BANERJI
The people's car, also the cheapest in the world, is here with us and as we write this, it is being scrutinised by millions across the world. But not many know that the Nano is not only a work of art perfected by 50 engineers in Tata Motor's plant in Pune-the character of this low-cost, cute-looking, four-wheeled vehicle has the stamp of Ratan Tata all over it.
It was Tata, a trained architect himself, who wanted a car tall enough to hold his 6 ft tall frame. People say he once joked in the factory that he wanted to drive the car himself at the launch. That is how the car gets its tall boy looks.
When the company was looking to cut costs, it was Tata who suggested the Nano have one windscreen wiper instead of two. The original blueprint for the design of the car, prepared by Italy's Institute of Development in Automotive Design-which had also designed the Indica over a decade earlier-had a more sedate-looking car. Tata, with his eye for detail and aesthetic sense, made it look more revolutionary and, few will deny, more likeable. Along the way, it became less expensive as well.
But the Nano is not a story of one product. It is not a story of Ratan Tata's long pending dream. It is a story of the journey of Tata Motors itself. As the Tata patriarch himself admitted after the unveiling, it was the Indica that was a bigger risk. For a successful company, Nano is a means of achieving an ambition, not of survival.
In many ways, the Nano story starts in 2000. That was the year when the company, despite its Indica, faced losses for the first time in its 55-year history. An economy that was in decline resulted in the company's turnover receding by almost 9 per cent in 2000-1.
Till then Tata Motors was the face of the Indian highways. Its sturdy trucks and buses were as ubiquitous on the dusty landscape as the roadside dhabas. The company was the unchallenged leader in the auto industry with an over 65 per cent market share.
Things changed after 1992, when globalisation stepped in and Tata found itself wanting. A spate of technological joint ventures followed, first with Cummins Engine Co and then with UK's Tata Holset Ltd and Tata entered the passenger car space with the Indica in 1998. The idea then was to entrench itself in a widely changing industry but the crisis at the turn of the century proved that Tata was in trouble. In 2000, Tata Motors was a bulging, slow-moving auto giant all set for decay.
The company went back to the drawing board and the commercial vehicle division was the one that saw the first change. The head of the division, Ravi Kant (the current MD), decided to revolutionise the flow and inject young blood. Instead of depending on the grey heads, he asked the engineers to show the way. The solution he had in mind was to cut costs.
It was in those times of distress that a saviour in the form of Girish Wagh emerged. Wagh was given the responsibility of a project so risky that at that time only a young man could have taken it. It was to build a small truck that would ensure last mile connectivity. Something that would work where the traditional trucks stopped. Today we know it as the Tata Ace - a mini truck that was such a runaway success that even passenger cars paled in comparison.
Ace's success convinced Tata that a small car, built frugally but practically, would sell. "Nano was a concept that was in Tata's mind even as Ace was being developed. In many ways it is a precursor to Nano and its success convinced him of its saleability-an important facet for a listed entity with shareholders riding on it," said a Bosch official, the company that supplies Nano engines.
Wagh was the obvious and automatic choice for Nano as well. By the time Tata announced his wish to make a small car in 2003, the company was back to its money-making ways. After that slump in 2001, the company's revenues went up in 2002-3 and by the next fiscal, the turnaround was complete.
"In many ways I was more nervous with the Indica. That was a time when we were getting into a completely new area of passenger cars. Our CV business was also not in great shape. So there was pressure," Tata himself admits. "Now both our divisions are doing well and making money."
But unlike the Ace, which had to be small and not necessarily inexpensive, Nano had to be both. Wagh knew that as the company challenged its own limitations, its component suppliers had to do the same. "The Nano was as much a dream for us as it was for our suppliers. They have challenged their own capabilities and have helped us in no small way in realising our dream," says Tata Motors Managing Director Ravi Kant.
The engine, alternators, management systems and brakes come from Bosch, transmission comes from Birla's Avtec Ltd, steel from its own Tata Steel, castings from Tata Metallics, headlights from Lumax and batteries from Exide. All these components are different from the standard ones fitted in other small cars and the companies have made concessions and spent extra hours on R&D for the dream car. Some do not even expect to make money with the association.
"Our association with the Nano project is more notional. We do not have major margins and will start making money only after 1-2 years," said P.K. Kataky, Director (Automotive), Exide Industries Ltd.
The challenges did not end with the product alone. In the wake of controversy surrounding the policy on SEZ, Singur in West Bengal, the site for the Nano factory, became a rallying point for protestors. Tata had won the technological battle but a political one still stared it in the face.
Tata lost over four months and there were anxious moments when company officials sometime thought aloud if the project should be shifted. A belligerent monsoon last year did not help matters either. The low-lying factory site was flooded and work had to be stopped. "Thankfully we had not placed any equipment at that time or the loss and the delay would have been greater," says Tata. With the passage of time, both the opposition and rain water receded.
The dream came to the fore four years ago but no one knows how cherished or long standing it is for Tata. The sense of relief on his face was palpable and as he stood addressing the world with the car in the background, he looked the youngest 70-year-old ever.
Ratan Tata's dream has stepped out of its private domain and is awaiting mass approval. Tata Motors will have well and truly arrived.
Ratan Tata's quiet moment of triumph was deserved. Despite being born to luxury, he had felt for the Indian family, riding four to a bike. Their dream machine-his dream machine-was here now, having weathered the odds and the critics' pessimism. To top it, there came news that the Government had allocated spectrum to his companies to operate GSM mobile services, a moment that harkened back to bitter wrangling with established GSM players.
The initial response to the Nano has been overwhelming and the tiny, Noddy-land car is expected to help the company cross several milestones. With revenues at Rs 1,29,994 crore for the financial year 2006-7, and group companies enjoying a market capitalisation of Rs 2,51,487 crore as on January 10, 2008, the Tata Group is on a strong footing, contributing more than 3 per cent to India's GDP. Nano, being the world's cheapest car, has made international players sit up in amazement and the company has received proposals from some African, Latin American and Southeast Asian countries to manufacture the car there.
The Nano will make millions of Indians mobile. But then, that has always been a Tata speciality: over the 138 years of the company's existence, it has been helping India propel itself forward. It is emblematic of the company's own recent push to become a proactive corporate mover, not the stolid doer it had been for generations. The acquisition of Tetley in 2000, the takeover of Corus to become the fifth largest steel company in the world and upping its stakes to become the frontrunner in acquiring the Jaguar and Land Rover brands from Ford, all make a statement for Tata as a company on the move.
When Tata Tea bought Tetley, it made big news as Tetley was a much bigger company. Similarly when Tata Steel took over Corus, it did so without a hint of corporate bashfulness. When Tata Tea bought 30 per cent stake in Glaceau, it was looking for the international marketing acumen of the company to leverage for Tata Tea. But then with another company acquiring the majority stake in Glaceau, Tata was left with no option than to book the gains of its investment in Glaceau. But there was still a footnote to the episode and it stated that the Tata Group was aggressive about going global.
The importance that the economic community puts on the Tatas is evident from the fact that three group companies form a part of the Sensex, the most to represent a corporate. RDAG (Reliance Dhirubhai Ambani Group) is represented by two companies in the benchmark stock market index. The combined weightage of the market cap of the three companies in the Sensex is 6.4 per cent. Tata has 13 other listed companies, excluding the three, that are a part of the Sensex.
The future of the group will be defined by some of its flagship listed companies-TCS, Tata Steel, Tata Motors, Tata Power, Tata Teleservices and by Tata's venture into financial services with Tata Capital. In the current market scenario, not only does Tata Motors stand tall after the Nano, but Tata Steel, on the back of growing demand for steel and rising metal prices, is also strongly positioned.
Power is the buzzword in Tata circles these days. Tata Motors has bagged the Mundra Ultra Mega Power Project and there are other projects to be undertaken by the company. As for its finance company, the entity Tata Capital has three companies within it, Tata AMC, Tata AIG Insurance and Tata Investment Corporation. As and when Tata Capital gets listed, it will unlock a lot of value for the company.
How the company moves ahead will depend a lot on who takes over from Ratan Tata, a bachelor. Retirement, though, is not what is preoccupying Ratan Tata's mind. In fact, he has another dream-for himself and his countrymen: availability of clean drinking water. He has already put his scientists on the job of finding the cheapest method of purifying water for drinking.
The company has had a strong inheritance line and that has been an important aspect in the continuous evolution and growth of the company. Ever since Jamsetji Tata established the first textile unit in 1870, the company has rigorously moved ahead. Dorab Tata established Tata Steel and Tata Power and took the Tatas into new segments of operation. Then came the aviation pioneer JRD Tata, who brought commercial aviation to India under the name Tata Airlines, later nationalised into what became Air-India. He also has to his credit the tea business, hotels, trucks and locomotives, among others.
The latest in the line of Tata patriarchs, Ratan Tata has not proved less than his predecessors. He was instrumental in producing India's first indigenously designed and manufactured car, the Tata Indica, a new version of which was released a day before sibling Nano took centrestage. He has shown the aggressive face of the Tatas-as the acquisitions that it has gone for and successfully completed. And now he has delivered on his promise of launching the world's cheapest car. While Ratan Tata is around, surely there will be little talk of a successor.
SUMANT BANERJI
The people's car, also the cheapest in the world, is here with us and as we write this, it is being scrutinised by millions across the world. But not many know that the Nano is not only a work of art perfected by 50 engineers in Tata Motor's plant in Pune-the character of this low-cost, cute-looking, four-wheeled vehicle has the stamp of Ratan Tata all over it.
It was Tata, a trained architect himself, who wanted a car tall enough to hold his 6 ft tall frame. People say he once joked in the factory that he wanted to drive the car himself at the launch. That is how the car gets its tall boy looks.
When the company was looking to cut costs, it was Tata who suggested the Nano have one windscreen wiper instead of two. The original blueprint for the design of the car, prepared by Italy's Institute of Development in Automotive Design-which had also designed the Indica over a decade earlier-had a more sedate-looking car. Tata, with his eye for detail and aesthetic sense, made it look more revolutionary and, few will deny, more likeable. Along the way, it became less expensive as well.
But the Nano is not a story of one product. It is not a story of Ratan Tata's long pending dream. It is a story of the journey of Tata Motors itself. As the Tata patriarch himself admitted after the unveiling, it was the Indica that was a bigger risk. For a successful company, Nano is a means of achieving an ambition, not of survival.
In many ways, the Nano story starts in 2000. That was the year when the company, despite its Indica, faced losses for the first time in its 55-year history. An economy that was in decline resulted in the company's turnover receding by almost 9 per cent in 2000-1.
Till then Tata Motors was the face of the Indian highways. Its sturdy trucks and buses were as ubiquitous on the dusty landscape as the roadside dhabas. The company was the unchallenged leader in the auto industry with an over 65 per cent market share.
Things changed after 1992, when globalisation stepped in and Tata found itself wanting. A spate of technological joint ventures followed, first with Cummins Engine Co and then with UK's Tata Holset Ltd and Tata entered the passenger car space with the Indica in 1998. The idea then was to entrench itself in a widely changing industry but the crisis at the turn of the century proved that Tata was in trouble. In 2000, Tata Motors was a bulging, slow-moving auto giant all set for decay.
The company went back to the drawing board and the commercial vehicle division was the one that saw the first change. The head of the division, Ravi Kant (the current MD), decided to revolutionise the flow and inject young blood. Instead of depending on the grey heads, he asked the engineers to show the way. The solution he had in mind was to cut costs.
It was in those times of distress that a saviour in the form of Girish Wagh emerged. Wagh was given the responsibility of a project so risky that at that time only a young man could have taken it. It was to build a small truck that would ensure last mile connectivity. Something that would work where the traditional trucks stopped. Today we know it as the Tata Ace - a mini truck that was such a runaway success that even passenger cars paled in comparison.
Ace's success convinced Tata that a small car, built frugally but practically, would sell. "Nano was a concept that was in Tata's mind even as Ace was being developed. In many ways it is a precursor to Nano and its success convinced him of its saleability-an important facet for a listed entity with shareholders riding on it," said a Bosch official, the company that supplies Nano engines.
Wagh was the obvious and automatic choice for Nano as well. By the time Tata announced his wish to make a small car in 2003, the company was back to its money-making ways. After that slump in 2001, the company's revenues went up in 2002-3 and by the next fiscal, the turnaround was complete.
"In many ways I was more nervous with the Indica. That was a time when we were getting into a completely new area of passenger cars. Our CV business was also not in great shape. So there was pressure," Tata himself admits. "Now both our divisions are doing well and making money."
But unlike the Ace, which had to be small and not necessarily inexpensive, Nano had to be both. Wagh knew that as the company challenged its own limitations, its component suppliers had to do the same. "The Nano was as much a dream for us as it was for our suppliers. They have challenged their own capabilities and have helped us in no small way in realising our dream," says Tata Motors Managing Director Ravi Kant.
The engine, alternators, management systems and brakes come from Bosch, transmission comes from Birla's Avtec Ltd, steel from its own Tata Steel, castings from Tata Metallics, headlights from Lumax and batteries from Exide. All these components are different from the standard ones fitted in other small cars and the companies have made concessions and spent extra hours on R&D for the dream car. Some do not even expect to make money with the association.
"Our association with the Nano project is more notional. We do not have major margins and will start making money only after 1-2 years," said P.K. Kataky, Director (Automotive), Exide Industries Ltd.
The challenges did not end with the product alone. In the wake of controversy surrounding the policy on SEZ, Singur in West Bengal, the site for the Nano factory, became a rallying point for protestors. Tata had won the technological battle but a political one still stared it in the face.
Tata lost over four months and there were anxious moments when company officials sometime thought aloud if the project should be shifted. A belligerent monsoon last year did not help matters either. The low-lying factory site was flooded and work had to be stopped. "Thankfully we had not placed any equipment at that time or the loss and the delay would have been greater," says Tata. With the passage of time, both the opposition and rain water receded.
The dream came to the fore four years ago but no one knows how cherished or long standing it is for Tata. The sense of relief on his face was palpable and as he stood addressing the world with the car in the background, he looked the youngest 70-year-old ever.
Ratan Tata's dream has stepped out of its private domain and is awaiting mass approval. Tata Motors will have well and truly arrived.
Hero Honda to Start ‘Peoples’ Bike..?
Hero Honda is keen to do a Tata Nano to the motorcycle market.
“This (a low-price bike) has been on our horizon for a long time but we haven’t been able to come up with a solution till now,” Pawan Munjal, the company’s managing director, said in an exclusive chat with DNA. “But this is not the end and we hope to come up with a solution... we continue to work on this.”
The company controls 70% of the entry level bike (engine capacity above 75 cc but less than 125 cc) market and is equally comfortable straddling the less price-sensitive segments.
Munjal’s admission comes at a time when arch rival Bajaj Auto is believed to be ready with a low-priced bike, which is being contract manufactured in China. Expected to be priced at around Rs 25,000, this 125cc bike would initially be sold in overseas markets including China before being launched in India. Going by vendors, this bike is most likely not a step-thru moped kind of vehicle and any cost advantage to Bajaj is largely on account of sourcing extensively from China.
For its product, then, Hero Honda will need to take India’s frugal engineering prowess, as showcased in the Nano, to the next level. Munjal is clear his ‘Nano’ bike must be very affordable. “Whatever we bring should certainly have a significant price advantage.”
Also, there is no compromising on either durability or performance. “Just because we have an enhanced rural focus, it does not mean that rural customers can be offered products which do not stand the test of performance or durability. In fact, rural customers need sturdier vehicles (than urban ones),” said Munjal.
So it may be a regular motorcycle, after all. Munjal cited Hero Honda’s earlier experience with mopeds --- which he dubbed as “glorified cycles” --- to emphasise that performance and load carrying capacity were essential.
“We launched one of Honda Motor Co’s most popular models in 1997, called the Street. It was a step thru motorcycle, an engineering marvel, but didn’t quite work in India. Why? Because the customers saw it essentially as a moped and expected it be priced like one,” he explained.
Vendors too indicate that any full-blooded low-priced vehicle for India would need to be developed from scratch, since the low-cost bikes Honda Motor sells in markets such as Thailand and China are all step-thru.
“This (a low-price bike) has been on our horizon for a long time but we haven’t been able to come up with a solution till now,” Pawan Munjal, the company’s managing director, said in an exclusive chat with DNA. “But this is not the end and we hope to come up with a solution... we continue to work on this.”
The company controls 70% of the entry level bike (engine capacity above 75 cc but less than 125 cc) market and is equally comfortable straddling the less price-sensitive segments.
Munjal’s admission comes at a time when arch rival Bajaj Auto is believed to be ready with a low-priced bike, which is being contract manufactured in China. Expected to be priced at around Rs 25,000, this 125cc bike would initially be sold in overseas markets including China before being launched in India. Going by vendors, this bike is most likely not a step-thru moped kind of vehicle and any cost advantage to Bajaj is largely on account of sourcing extensively from China.
For its product, then, Hero Honda will need to take India’s frugal engineering prowess, as showcased in the Nano, to the next level. Munjal is clear his ‘Nano’ bike must be very affordable. “Whatever we bring should certainly have a significant price advantage.”
Also, there is no compromising on either durability or performance. “Just because we have an enhanced rural focus, it does not mean that rural customers can be offered products which do not stand the test of performance or durability. In fact, rural customers need sturdier vehicles (than urban ones),” said Munjal.
So it may be a regular motorcycle, after all. Munjal cited Hero Honda’s earlier experience with mopeds --- which he dubbed as “glorified cycles” --- to emphasise that performance and load carrying capacity were essential.
“We launched one of Honda Motor Co’s most popular models in 1997, called the Street. It was a step thru motorcycle, an engineering marvel, but didn’t quite work in India. Why? Because the customers saw it essentially as a moped and expected it be priced like one,” he explained.
Vendors too indicate that any full-blooded low-priced vehicle for India would need to be developed from scratch, since the low-cost bikes Honda Motor sells in markets such as Thailand and China are all step-thru.
Black Market Hit Tata Nano too
Demand for the Tata’s wonder car Nano is expected to be 10 times the supply. Enter the black market, hundreds of black marketers have spread themselves across dealers
, banks and outlets to make hay while the Nano shines.
If any car is a hit at launch, industry sources indicate at least 10 per cent of cars sold are through the black market route.
The first time India witnessed such a hype was with the first Maruti 800, the initial premium was as high as 100 per cent. Maruti itself cashed in launching the 'tatkal' scheme during the old license permit raj days, which guaranteed quick delivery but at a 30 per cent premium.
We have seen similar premium being charged on Bajaj scooters, Tata trucks and even Maruti's diesel Swift Dzire, which in fact has a 4-6 month waiting period.
Experts say in the case of the Tata Nano, people may pay a premium but not over Rs 20,000 because today the buyer has more options.
"People would wait and watch and see the performance and the reaction of people. They will then buy, thus, black market will be marginal," said S P Shah, president, Federation of Automobile Dealers Association.
It is all going to boil down to just how many bookings the Nano gets. With the delivery fixed at 1 lakh cars once allotment begins in June, the black marketers are also expected to crawl right out of the woodwork with a 15-20 per cent premium that could even go to 40% if there is a demand frenzy.
source: ndtv.com
, banks and outlets to make hay while the Nano shines.
If any car is a hit at launch, industry sources indicate at least 10 per cent of cars sold are through the black market route.
The first time India witnessed such a hype was with the first Maruti 800, the initial premium was as high as 100 per cent. Maruti itself cashed in launching the 'tatkal' scheme during the old license permit raj days, which guaranteed quick delivery but at a 30 per cent premium.
We have seen similar premium being charged on Bajaj scooters, Tata trucks and even Maruti's diesel Swift Dzire, which in fact has a 4-6 month waiting period.
Experts say in the case of the Tata Nano, people may pay a premium but not over Rs 20,000 because today the buyer has more options.
"People would wait and watch and see the performance and the reaction of people. They will then buy, thus, black market will be marginal," said S P Shah, president, Federation of Automobile Dealers Association.
It is all going to boil down to just how many bookings the Nano gets. With the delivery fixed at 1 lakh cars once allotment begins in June, the black marketers are also expected to crawl right out of the woodwork with a 15-20 per cent premium that could even go to 40% if there is a demand frenzy.
source: ndtv.com
Petrole on High Demand by Tata Nano
One of the many economic trials suffered by Americans during 2008 was runaway oil prices. Remember paying nearly $4.oo per gallon for gasoline? Those days may be back, with a vengeance, sooner rather than later. My latest book, Bankruptcy of Our Nation, highlights the global energy crisis and America’s ever-growing dependence on foreign oil. In it I explain in great detail how our poor energy policies will eventually lead to massive energy price increases for every American.
Now an innovative mini-car from India may leave Americans struggling to afford fuel for their SUVs.
China has experienced staggering economic growth, has an insatiable demand for natural resources and, most alarming, wields an enormous population that desperately seeks to emulate the western lifestyle of over-consumption. This is an unfortunate combination for a world community running low on many vital natural resources and with no firm contingency plans.
Despite the economic slowdown, China still leads in the world’s fastest-growing automobile market. In 2008 the country produced an astonishing 14,000 new cars - per day.
Now another up-and-coming global power, India, is making news in the global automobile market. The country boasts the second fastest-growing automobile market in the world, and has been aggressively promoting car ownership among its citizens, seeking to quadruple automotive sales by 2016.
The primary obstacle to getting cars onto Indian roads has been price, especially for India’s poorer population. Last week this obstacle was all but demolished when Indian automaker, Tata Motors, announced plans to begin mass production of the Tata Nano. According to the Guinness Book of Records, the Nano is the world’s least expensive car retailing for an astonishing low base price of $2000 USD. That’s right, the Nano will sell for less than the cost of many extras on American vehicles.
Tata Motors made headlines in 2008 when it publicly acquired the luxury Jaguar and Land Rover brands from Ford Motor Company. The buy-out smacked of irony, considering Britain’s formidable colonization of India in centuries past. The world is, indeed, getting flatter with each passing year.
While price breakthroughs may be good for India, they are far from good news for western nations. Why? Because now many of India’s 1.1 billion citizens will soon be able to purchase their first automobile. This means demand for the world’s shrinking oil supply will increase exponentially as the Tata Nano, and similar vehicles certain to come along in the future, begin filling the streets of this emerging nation.
To say that western expectations of energy supplies have been unrealistic and, quite frankly, irresponsible would be an understatement. Apparently it will take severe constraints of energy supplies in the west before decisive action is taken. And then it might be too late.
Now an innovative mini-car from India may leave Americans struggling to afford fuel for their SUVs.
China has experienced staggering economic growth, has an insatiable demand for natural resources and, most alarming, wields an enormous population that desperately seeks to emulate the western lifestyle of over-consumption. This is an unfortunate combination for a world community running low on many vital natural resources and with no firm contingency plans.
Despite the economic slowdown, China still leads in the world’s fastest-growing automobile market. In 2008 the country produced an astonishing 14,000 new cars - per day.
Now another up-and-coming global power, India, is making news in the global automobile market. The country boasts the second fastest-growing automobile market in the world, and has been aggressively promoting car ownership among its citizens, seeking to quadruple automotive sales by 2016.
The primary obstacle to getting cars onto Indian roads has been price, especially for India’s poorer population. Last week this obstacle was all but demolished when Indian automaker, Tata Motors, announced plans to begin mass production of the Tata Nano. According to the Guinness Book of Records, the Nano is the world’s least expensive car retailing for an astonishing low base price of $2000 USD. That’s right, the Nano will sell for less than the cost of many extras on American vehicles.
Tata Motors made headlines in 2008 when it publicly acquired the luxury Jaguar and Land Rover brands from Ford Motor Company. The buy-out smacked of irony, considering Britain’s formidable colonization of India in centuries past. The world is, indeed, getting flatter with each passing year.
While price breakthroughs may be good for India, they are far from good news for western nations. Why? Because now many of India’s 1.1 billion citizens will soon be able to purchase their first automobile. This means demand for the world’s shrinking oil supply will increase exponentially as the Tata Nano, and similar vehicles certain to come along in the future, begin filling the streets of this emerging nation.
To say that western expectations of energy supplies have been unrealistic and, quite frankly, irresponsible would be an understatement. Apparently it will take severe constraints of energy supplies in the west before decisive action is taken. And then it might be too late.
Luxury is in Demand
The Indian car market is already on the high boom and the demand for the luxury car market are growing in a fast pace.
Tata Nano, the people’s car has invaded the car market but not in the luxury car segment in India. There are no bounds for a car lovers’ passion for the finest dream machine on wheels to find their way to the cellars of the rich and famous.
Luxury carmakers have done a thorough study on the Indian buyers and the Indian car market and are aware of their choice and desires of their dream car. And that help them to move steadily with their plans to manufacture and / or sell luxury cars for the Indian market. The study reveal that, the current market for the luxury cars in India is estimated 4,500-5,000 units per annum, which is expected grow to 10,000 units by 2010.
Audi A4 sedan will be rolling out in India from Audi India. This new generation model was launched recently launched in Europe and now it is being brought to India simultaneously. Initially the car will be imported but will carry the price of a locally assembled car.
Mitsubishi Motors will be also rolling out its luxury sedan, the Lancer Evolution X by early 2009. Currently Mitsubishi does not have any plan to manufacture this luxury sedan locally and so it will be completely imported. This would mean that the price of the Mitsubishi Lancer Evolution X will be very high. The price of Lancer Evolution X is priced close to Rs 13 lakh globally. But with the imposed duties on import, the cost may go up to Rs 21.70 - Rs 23.5 lakh.
Ferrari one of the big car brands is expected to hit the Indian roads by 2010 and this decision was taken after the Magic India Discovery tour. After the thorough study of the Indian market, Ferrari decided to enter the Indian car market very soon.
May be, the growing demand prompted style guru, Dilip Chabria to showcase his super luxury concept car ‘Amberoid’, that was displayed recently held Auto Expo in New Delhi. This Amby tcosts a neat Rs4 crore.
Amby is adorned with a sleek instrument panel backed by a satellite navigation system, rear vision camera, three LCD televisions, Internet and videoconferencing-enabled flat bed and multi-coloured mood lighting, now this is what we call it as a royal ride!
Tata Nano, the people’s car has invaded the car market but not in the luxury car segment in India. There are no bounds for a car lovers’ passion for the finest dream machine on wheels to find their way to the cellars of the rich and famous.
Luxury carmakers have done a thorough study on the Indian buyers and the Indian car market and are aware of their choice and desires of their dream car. And that help them to move steadily with their plans to manufacture and / or sell luxury cars for the Indian market. The study reveal that, the current market for the luxury cars in India is estimated 4,500-5,000 units per annum, which is expected grow to 10,000 units by 2010.
Audi A4 sedan will be rolling out in India from Audi India. This new generation model was launched recently launched in Europe and now it is being brought to India simultaneously. Initially the car will be imported but will carry the price of a locally assembled car.
Mitsubishi Motors will be also rolling out its luxury sedan, the Lancer Evolution X by early 2009. Currently Mitsubishi does not have any plan to manufacture this luxury sedan locally and so it will be completely imported. This would mean that the price of the Mitsubishi Lancer Evolution X will be very high. The price of Lancer Evolution X is priced close to Rs 13 lakh globally. But with the imposed duties on import, the cost may go up to Rs 21.70 - Rs 23.5 lakh.
Ferrari one of the big car brands is expected to hit the Indian roads by 2010 and this decision was taken after the Magic India Discovery tour. After the thorough study of the Indian market, Ferrari decided to enter the Indian car market very soon.
May be, the growing demand prompted style guru, Dilip Chabria to showcase his super luxury concept car ‘Amberoid’, that was displayed recently held Auto Expo in New Delhi. This Amby tcosts a neat Rs4 crore.
Amby is adorned with a sleek instrument panel backed by a satellite navigation system, rear vision camera, three LCD televisions, Internet and videoconferencing-enabled flat bed and multi-coloured mood lighting, now this is what we call it as a royal ride!
Lassen's from Tata's Nano
The breakthrough innovations of the $2,500 Nano car carry a lot of important lessons for Western executives
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 (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 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:"
o increased modularity (both in products and processes)
o aggressive leveraging of existing third-party, often noncommercial, institutions in rural areas to more effectively reach target customers
o 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) 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.
o 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.
o 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.
o 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.
John Hagel and John Seely Brown are co-chairman and independent co-chairman, respectively, of the Center for Edge Innovation, a part of Deloitte & Touche USA LLP. John Hagel writes a blog at Edge Perspectives .
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 (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 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:"
o increased modularity (both in products and processes)
o aggressive leveraging of existing third-party, often noncommercial, institutions in rural areas to more effectively reach target customers
o 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) 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.
o 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.
o 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.
o 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.
John Hagel and John Seely Brown are co-chairman and independent co-chairman, respectively, of the Center for Edge Innovation, a part of Deloitte & Touche USA LLP. John Hagel writes a blog at Edge Perspectives .
Tata Nano: Pride and Joy
The Tata Nano might be the world's cheapest car but there was nothing cut-price about its launch.
After weeks of anticipation and a morning of wall-to-wall build-up on local television networks, which covered the event live, India's "people's car" rolled on stage to the epic strains of Richard Strauss's Also Sprach Zarathustra, with Ratan Tata, the chairman of Tata Motors, at the wheel.
You could almost hear the cheer going up across India - and you couldn't hear yourself think in the auditorium - as waiting journalists, members of the public and the minister of commerce, Kamal Nath, broke into spontaneous and euphoric applause.
Tata (below), suave and 70, appeared to have a lump in his throat as he announced the realisation of a dream that has taken more than four years and 500 engineers to bring to reality.
This was more than just the launch of a car, he said: it was the jumping-off point for an ideal that its designers hope will revolutionise the lives of millions of Indians, most of whom live in rural areas many miles from the nearest bus stop.
A hologram of an Indian family four-up on a motorbike - a familiar sight in the country - reminded the audience that while the Nano might not have airbags and European safety certificates, it's a good deal safer than a two-wheeler.
Mr Tata spoke with feeling: "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.
"Today, we indeed have a people's car, which is affordable and yet built to meet safety requirements, to be fuel-efficient and low on emissions." Tata's security men pleaded in vain for people not to scratch the car as enthusiasm swept away the choreographed launch ceremony and more than 1,000 delegates and journalists fought for a glimpse of the new machine.
And for Indians in the audience, the launch of Tata's wonder-car was an emphatic, jubilant statement to the world of what India is capable of delivering.
After weeks of anticipation and a morning of wall-to-wall build-up on local television networks, which covered the event live, India's "people's car" rolled on stage to the epic strains of Richard Strauss's Also Sprach Zarathustra, with Ratan Tata, the chairman of Tata Motors, at the wheel.
You could almost hear the cheer going up across India - and you couldn't hear yourself think in the auditorium - as waiting journalists, members of the public and the minister of commerce, Kamal Nath, broke into spontaneous and euphoric applause.
Tata (below), suave and 70, appeared to have a lump in his throat as he announced the realisation of a dream that has taken more than four years and 500 engineers to bring to reality.
This was more than just the launch of a car, he said: it was the jumping-off point for an ideal that its designers hope will revolutionise the lives of millions of Indians, most of whom live in rural areas many miles from the nearest bus stop.
A hologram of an Indian family four-up on a motorbike - a familiar sight in the country - reminded the audience that while the Nano might not have airbags and European safety certificates, it's a good deal safer than a two-wheeler.
Mr Tata spoke with feeling: "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.
"Today, we indeed have a people's car, which is affordable and yet built to meet safety requirements, to be fuel-efficient and low on emissions." Tata's security men pleaded in vain for people not to scratch the car as enthusiasm swept away the choreographed launch ceremony and more than 1,000 delegates and journalists fought for a glimpse of the new machine.
And for Indians in the audience, the launch of Tata's wonder-car was an emphatic, jubilant statement to the world of what India is capable of delivering.
Small wheels, big lessons
The flutter created by the Nano, Tata Motors' new low-cost car, will not subside anytime soon. This car, costing about a lakh rupees ($2,500), is half the cost of the next cheapest car, made in China ($5,000). It reportedly meets the required benchmarks on safety, fuel efficiency and emission norms. Sceptics question these claims, asking us to wait for drive tests to validate them. However, the widespread enthusiasm accorded to the car represents a new middle class euphoria. People have experienced a sudden sense of empowerment in the possibility of their steadily rising incomes bringing the fruits of development within their grasp. While pedestrians opt for the cycle, and the cyclist yearns for a two-wheeler, the vast majority of the urban working class aspire to a car for safety, status and respectability. Nano helps them make this psychological transition.
We have often been told by the likes of CK Prahalad that there is enormous opportunity at the bottom of the pyramid. Nano is yet one more example. The rapidly increasing teledensity in semi-urban and rural areas is another. I believe that embracing innovative low-cost services has wider benefits for the Economy. Illustratively, low-cost housing, affordable educational hubs and reliable healthcare facilities. Ingenuity and engineering skills can drive fundamental changes in the Economy in multiple ways. It is well known that agriculture now yields only 18% of India's GDP but provides livelihood to over 58% of the population. Massive urbanisation has scarcely begun. It is inevitable that we would need to provide employment to millions through non-agricultural means. We have to improve agricultural productivity, moving it up the value-addition chain, while supporting labour-intensive manufacturing. If done, this could mark the start of our effort to fill "the missing middle", with comparative factor endowments sharpening our competitive edge.
Building self-contained satellite cities entails a daunting pace of urbanisation. Without low-cost housing, affordable education and reliable healthcare, this would not be possible. There are many affirmative action initiatives outlined in the Eleventh Five Year Plan, which, if implemented, can kindle the ingenuity of the corporate sector.
The Nano also provides policymakers an opportunity to correct some manifest distortions. First and foremost, India needs an integrated energy policy. Continued subsidisation of fossil fuel consumption results in multiple distortions of the Economy. The massive under-recoveries from the sale of petroleum products by oil Companies is clearly iniquitous. The subsidies benefit the affluent and compress resources available for social and physical infrastructure. No doubt, the petroleum sector has constituted an acceptably large percentage of indirect taxes. Rationalising the tax structure for petroleum and related products is an independent exercise which cannot be linked with the broader principle of economic costing for multiple forms of energy.
Depoliticising the pricing of petrol, diesel and kerosene would help mitigate environmental degradation, minimise adulteration and free resources for outlay on public goods. It is equally important that even while per capita energy consumption rises, given the current pace of economic development, priority must be accorded to energy efficiency and investment in renewals. Without a rational pricing policy, renewals will remain commercially unviable. We have for long known that subsidising electricity and fuels, not to mention other forms of cross-subsidies, have not proven electorally advantageous to the party in office. Just think of Gujarat and Himachal. India has entered a cycle of multiple elections this year and the next, and so leaving energy policies in a mess at this juncture would be irresponsible governance.
Second, the framework of the Urban Reforms Mission need restructuring. The proposed allocations in the Eleventh Plan for the urban sector are grossly inadequate if it is to cope with the inevitable rapid pace of urbanisation, extend mass transport systems in non-metro cities, and support the development of satellite towns.
Third, India needs an integrated transport policy. This goes beyond improved planning and implementation of rural roads, upgrading district roads and state highways and speedier completion of various components of the national highways project. A coherent approach is needed to improve operations and maintenance, secure better management of vehicular traffic, and apply user charges for road amenities. Highway patrolling, provisioning and economic costing of parking space need attention, too. Besides, our public transport systems remain hopelessly inadequate and inefficient. Perhaps the Delhi Metro example need wider and innovative replication in many other cities as well as emerging satellite configurations. Buses need fiscal incentives apart from improved quality and large investments in driving schools and operations modernisation and maintenance. A sensible transport policy would also need to be multi-nodal, including sensible tariffs for different modes of transport for goods and services. Deregulation and competition have made air travel affordable to millions. Depoliticising railway fares, with an increased dose of competition, will be to everyone's benefit.
The replication of the Nano model in multiple sectors can make growth genuinely inclusive. India needs to plan for rapidly rising rural and middle class aspirations. The time has come for their embedded yearnings to be realised.
- NK Singh,The author is a former bureaucrat. These are his personal views.
We have often been told by the likes of CK Prahalad that there is enormous opportunity at the bottom of the pyramid. Nano is yet one more example. The rapidly increasing teledensity in semi-urban and rural areas is another. I believe that embracing innovative low-cost services has wider benefits for the Economy. Illustratively, low-cost housing, affordable educational hubs and reliable healthcare facilities. Ingenuity and engineering skills can drive fundamental changes in the Economy in multiple ways. It is well known that agriculture now yields only 18% of India's GDP but provides livelihood to over 58% of the population. Massive urbanisation has scarcely begun. It is inevitable that we would need to provide employment to millions through non-agricultural means. We have to improve agricultural productivity, moving it up the value-addition chain, while supporting labour-intensive manufacturing. If done, this could mark the start of our effort to fill "the missing middle", with comparative factor endowments sharpening our competitive edge.
Building self-contained satellite cities entails a daunting pace of urbanisation. Without low-cost housing, affordable education and reliable healthcare, this would not be possible. There are many affirmative action initiatives outlined in the Eleventh Five Year Plan, which, if implemented, can kindle the ingenuity of the corporate sector.
The Nano also provides policymakers an opportunity to correct some manifest distortions. First and foremost, India needs an integrated energy policy. Continued subsidisation of fossil fuel consumption results in multiple distortions of the Economy. The massive under-recoveries from the sale of petroleum products by oil Companies is clearly iniquitous. The subsidies benefit the affluent and compress resources available for social and physical infrastructure. No doubt, the petroleum sector has constituted an acceptably large percentage of indirect taxes. Rationalising the tax structure for petroleum and related products is an independent exercise which cannot be linked with the broader principle of economic costing for multiple forms of energy.
Depoliticising the pricing of petrol, diesel and kerosene would help mitigate environmental degradation, minimise adulteration and free resources for outlay on public goods. It is equally important that even while per capita energy consumption rises, given the current pace of economic development, priority must be accorded to energy efficiency and investment in renewals. Without a rational pricing policy, renewals will remain commercially unviable. We have for long known that subsidising electricity and fuels, not to mention other forms of cross-subsidies, have not proven electorally advantageous to the party in office. Just think of Gujarat and Himachal. India has entered a cycle of multiple elections this year and the next, and so leaving energy policies in a mess at this juncture would be irresponsible governance.
Second, the framework of the Urban Reforms Mission need restructuring. The proposed allocations in the Eleventh Plan for the urban sector are grossly inadequate if it is to cope with the inevitable rapid pace of urbanisation, extend mass transport systems in non-metro cities, and support the development of satellite towns.
Third, India needs an integrated transport policy. This goes beyond improved planning and implementation of rural roads, upgrading district roads and state highways and speedier completion of various components of the national highways project. A coherent approach is needed to improve operations and maintenance, secure better management of vehicular traffic, and apply user charges for road amenities. Highway patrolling, provisioning and economic costing of parking space need attention, too. Besides, our public transport systems remain hopelessly inadequate and inefficient. Perhaps the Delhi Metro example need wider and innovative replication in many other cities as well as emerging satellite configurations. Buses need fiscal incentives apart from improved quality and large investments in driving schools and operations modernisation and maintenance. A sensible transport policy would also need to be multi-nodal, including sensible tariffs for different modes of transport for goods and services. Deregulation and competition have made air travel affordable to millions. Depoliticising railway fares, with an increased dose of competition, will be to everyone's benefit.
The replication of the Nano model in multiple sectors can make growth genuinely inclusive. India needs to plan for rapidly rising rural and middle class aspirations. The time has come for their embedded yearnings to be realised.
- NK Singh,The author is a former bureaucrat. These are his personal views.
Tata opened Corporate Bookings for 'Nano'
Tata Motors has opened a corporate booking procedure through which bulk bookings can be placed in the name of the company. This will enable the company to book Nano cars for their employees..
THE TREMENDOUS response to the openings of bookings for Tata Nano car from all sections of society has encouraged Tata Motors to go a step further.
Tata Motors has opened a corporate booking procedure through which bulk bookings can be placed in the name of the company. This will enable the company to book Nano cars for their employees.
According to a press release by the company, the process for corporate booking specifies-multiple bookings made in the name of corporate/companies, for example: Infosys can book 200 cars under its company name as the first applicant, but in 200 different forms. Tata Motors will consider all the forms.
However, the number specified is an example and there was no clear direction on restriction of numbers on forms submitted per company.
The applications would be subject to multiple allotment procedure and could be allotted multiple Nanos based on random selection. The proof of corporate/company should be made available to Tata representatives ‘if required’ at the time of delivery.
The company has also extended the facility of multiple bookings in an individual name. This system would increase the probability of allotment.
The Nano bookings for first phase opened on April 9, 2009, and are expected to close on April 25, 2009. The delivery of first phase of allotment will be made after 60 days of closure of bookings. Nano is famed as the world’s cheapest car for its rupees one lakh manufacturer’s price.
THE TREMENDOUS response to the openings of bookings for Tata Nano car from all sections of society has encouraged Tata Motors to go a step further.
Tata Motors has opened a corporate booking procedure through which bulk bookings can be placed in the name of the company. This will enable the company to book Nano cars for their employees.
According to a press release by the company, the process for corporate booking specifies-multiple bookings made in the name of corporate/companies, for example: Infosys can book 200 cars under its company name as the first applicant, but in 200 different forms. Tata Motors will consider all the forms.
However, the number specified is an example and there was no clear direction on restriction of numbers on forms submitted per company.
The applications would be subject to multiple allotment procedure and could be allotted multiple Nanos based on random selection. The proof of corporate/company should be made available to Tata representatives ‘if required’ at the time of delivery.
The company has also extended the facility of multiple bookings in an individual name. This system would increase the probability of allotment.
The Nano bookings for first phase opened on April 9, 2009, and are expected to close on April 25, 2009. The delivery of first phase of allotment will be made after 60 days of closure of bookings. Nano is famed as the world’s cheapest car for its rupees one lakh manufacturer’s price.
IT's ALL ABOUT NANO-"The Worlds Cheap Car"
NANO quoted as "New Breed of 21st century cars" is all set to hit the Indian market in the month of july 2009.
It is 3 metres long, seats four comfortably or five at a squeeze, does 65mph and aims to revolutionise travel for millions. The “People’s Car” is also the cheapest in the world at 100,000 rupees
The Nano can be booked at more than 30,000 locations in 1,000 cities across India, including Tata-owned department and electronics stores, with booking forms costing 300 rupees each. It will be available at just Rs. 2,999 down payment. Owners will be randomly selected from bookings made between April 9 and 25, and their prices will be protected. Initially, just 1 lakh Nanos will be produced. Delivery of the first lot of Nanos will be possible from July first week onwards.
As per the reports, more than 51,000 application forms have been sold so far. Tata Motors has entered into agreements with 18 preferred banks/NBFCs for financing and with five partner insurance companies to offer comprehensive insurance, under the ‘Tata Motors Insurance’ banner. Customers willing to book the Nano can either pay the entire booking amount using their own funds or seek financing. Booking amount is:
For Nano Base - Rs. 95,000.00
For Nano CX - Rs. 1,20,000.00
For Nano LX - Rs. 1,40,000.00
Tata Motors has entered into agreements with National Insurance, ICICI Lombard General Insurance, Royal Sundaram Alliance General Insurance, United India Insurance and HDFC Ergo General Insurance. The insurance premium would start at Rs 3,468 (ex New Delhi).
BOOKING PROCEDURE:
Applicants have an option of retaining their booking deposit if they do not get allotment in the first phase. Customers retaining their booking deposit will be eligible for interest on their deposit, effective from the date of announcement of allotment of the second phase, at 8.5% for a retention period of 1-2 years and 8.75% for a retention period of more than 2 years.
Within 60 days of the closure of bookings on April 25th , 2009, Tata Motors will process and announce the allotment of 100,000 cars in the first phase of deliveries, through a computerised random selection procedure. These 100,000 allotments will be price protected for the launch prices till delivery of the cars but the booking amounts will not bear any interest for the customers.
Nano is available in following 3 variants (Prices are Ex-Showroom Mumbai):
Nano Base/Standard/Basic - 134000.00
Nano CX - 160000.00
Nano LX - 185000.00
The Base model of Tata Nano features:
Seat Belts.
High mounted Rear Stop lamp.
Only Driver seat adjust-sliding and reclining.
Fixed front passenger seat.
Folding Rear Seats.
2-Spoke Steering wheel.
Grey bumpers and interiors.
Driver side Outside rear view mirror.
In addition to above features the mid variant CX features:
AC.
Tinted glasses.
Metallic paint.
In addition to above features the top variant LX features:
Tripmeter.
Front Power windows.
Central Locking.
Front and Rear fog lamps.
3-Spoke Steering wheel.
Moulded door trim with fabric inserts.
Floor console with glass holder.
Anti-Glare inside rear view mirror.
Sunvisors on both sides.
Tata Nano is available in following colors:
Nano Base - Ivory White, Racing Red, Summer Blue.
Nano CX - Ivory White, Racing Red, Summer Blue, Champange Gold, Lunar Silver
Nano LX - Sunshine Yellow, Champange Gold, Lunar Silver
It is 3 metres long, seats four comfortably or five at a squeeze, does 65mph and aims to revolutionise travel for millions. The “People’s Car” is also the cheapest in the world at 100,000 rupees
The Nano can be booked at more than 30,000 locations in 1,000 cities across India, including Tata-owned department and electronics stores, with booking forms costing 300 rupees each. It will be available at just Rs. 2,999 down payment. Owners will be randomly selected from bookings made between April 9 and 25, and their prices will be protected. Initially, just 1 lakh Nanos will be produced. Delivery of the first lot of Nanos will be possible from July first week onwards.
As per the reports, more than 51,000 application forms have been sold so far. Tata Motors has entered into agreements with 18 preferred banks/NBFCs for financing and with five partner insurance companies to offer comprehensive insurance, under the ‘Tata Motors Insurance’ banner. Customers willing to book the Nano can either pay the entire booking amount using their own funds or seek financing. Booking amount is:
For Nano Base - Rs. 95,000.00
For Nano CX - Rs. 1,20,000.00
For Nano LX - Rs. 1,40,000.00
Tata Motors has entered into agreements with National Insurance, ICICI Lombard General Insurance, Royal Sundaram Alliance General Insurance, United India Insurance and HDFC Ergo General Insurance. The insurance premium would start at Rs 3,468 (ex New Delhi).
BOOKING PROCEDURE:
Applicants have an option of retaining their booking deposit if they do not get allotment in the first phase. Customers retaining their booking deposit will be eligible for interest on their deposit, effective from the date of announcement of allotment of the second phase, at 8.5% for a retention period of 1-2 years and 8.75% for a retention period of more than 2 years.
Within 60 days of the closure of bookings on April 25th , 2009, Tata Motors will process and announce the allotment of 100,000 cars in the first phase of deliveries, through a computerised random selection procedure. These 100,000 allotments will be price protected for the launch prices till delivery of the cars but the booking amounts will not bear any interest for the customers.
Nano is available in following 3 variants (Prices are Ex-Showroom Mumbai):
Nano Base/Standard/Basic - 134000.00
Nano CX - 160000.00
Nano LX - 185000.00
The Base model of Tata Nano features:
Seat Belts.
High mounted Rear Stop lamp.
Only Driver seat adjust-sliding and reclining.
Fixed front passenger seat.
Folding Rear Seats.
2-Spoke Steering wheel.
Grey bumpers and interiors.
Driver side Outside rear view mirror.
In addition to above features the mid variant CX features:
AC.
Tinted glasses.
Metallic paint.
In addition to above features the top variant LX features:
Tripmeter.
Front Power windows.
Central Locking.
Front and Rear fog lamps.
3-Spoke Steering wheel.
Moulded door trim with fabric inserts.
Floor console with glass holder.
Anti-Glare inside rear view mirror.
Sunvisors on both sides.
Tata Nano is available in following colors:
Nano Base - Ivory White, Racing Red, Summer Blue.
Nano CX - Ivory White, Racing Red, Summer Blue, Champange Gold, Lunar Silver
Nano LX - Sunshine Yellow, Champange Gold, Lunar Silver
One lakh car drives a billion dreams
Ending a four-year wait and bringing the dream of car ownership closer to millions, Tata Motors today unveiled the "People's Car" at a show here watched by the international automobile industry. Called Nano, the car will cost Rs 1 lakh as promised by the company which also assured meeting all safety and emission norms.
"Since we started the project four years back, there has been a steep increase in input cost but a promise is a promise," said Tata Group chief Ratan Tata after displaying his dream project at the Ninth Auto Expo.
"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 said.
"Tata Motors' engineers and designers gave their all for about four years to realise this goal. Today, we indeed have a people's car, which is affordable yet built to meet safety requirements and emission norms, to be fuel efficient and low on emissions. We hope it brings the joy, pride and utility of owning a car to many families who need personal mobility." This small car — Nano is 20 per cent shorter in length than the Maruti 800 but Tata claims it has 21 per cent more space — is powered by a 623 cc rear-mounted engine and will travel 20 km per litre. The car will cost Rs 1 lakh at the dealer-end but attract Value-Added Tax and transportation cost.
Apart from the standard version, Nano will also come in two deluxe models with air conditioning. While critics had been sceptical about the car meeting safety and emission norms, Tata said Nano will meet Bharat Stage-III emission norms and can also meet the stringent Euro 4 norms. The car has also gone through a full frontal crash test as per standard norms, he said.
Tata Motors expects two-wheeler riders to buy the car that costs half as much as those currently in the market. With just 8 people in 1,000 owning a car in India, there is huge potential to upgrade bike and scooter owners who bought about 7 million two-wheelers in 2006-07.
Commerce Minister Kamal Nath said Nano will help the common man shift from two-wheelers to four-wheelers. "It is a proud moment for India. It demonstrates India's technological and entrepreneurial ability. The car will help people move from two-wheeler to four-wheeler and it will leap-frog the two-wheeler. It fulfils the need of the common Indian who aspires to move from a two-wheeler to a four-wheeler," he said.
Tata also allayed fears expressed by environmentalist R K Pachauri and green activist Sunita Narain that a car at that price would add more vehicles, leading to higher pollution. "Pachauri will not have a nightmare and Sunita Narain can also sleep," he said.
On the reasons for choosing the name Nano, Tata said the car was about high technology and small size. He credited the development of Nano to Tata Motors' engineers, and said it was the capability and commitment to innovate that realised the dream. In fact, Tata Motors has applied for 34 patents for aggregate features, such as the two cylinder gasoline with single balancer shaft.
Asked if the company was looking to export the car as well, Tata said: "The first two-three years our focus will be India and see the Indian market appropriately addressed." He did not, however, rule out an overseas launch of the car.
Tata revealed what enabled it to cut down costs and score over the entire global auto industry. "We took the standard Maruti 800 as the base model and worked backwards on how we can reduce costs. We decided and found out that a tight package, that will mean a smaller, meaner car, lighter engine and higher fuel economy will do the trick," Tata said. "The decision to make it a rear engine driven was precisely to reduce the length of the car."
But why did other car makers miss the trick? "I cannot say for others but what is important is whether you have desire strong enough to prevent the odds from overwhelming you," Tata said.
At the site of the plant in Singur, West Bengal, where the first Nano will roll out, it is a race against time. Over 2500 people have been working in two shifts behind a guarded perimeter to complete the factory in time. Soon another shift will be introduced to make up for any backlog in work caused during the last heavy monsoon.
"Work will soon start in three shifts. Over 75 per cent work of the factory is complete and we hope by September of this year the first car will roll out of the factory,"' a top official of West Bengal Industrial Development Corp (WBIDC) told The Indian Express. A major portion of the work involving the setting up of a 230 KV substation on the project site to ensure uninterrupted power supply to the factory and the vendor park has almost been completed by ABB.
In order to save the site from inundation in the future, the state government has revived the 30-year-old Ghiya Kulti irrigation project at a cost of Rs 170 crore.
Next to the 645-acre plot that will have the main car plant, a vendor park is coming up on 290 acres to house the proposed 55 ancillary units. Already, 14 have started setting up theirs. These include Lord Swaraj Paul-owned Caparo Engineering Pvt Ltd, Rasandik Engineering Industries Indian Ltd, Rucha Engineers Pvt Ltd and Sharda Motor Industries Ltd. While Rasandik has plans of investing Rs 55 crore in the first phase of work at the vendor site, Rucha Engineering has committed Rs 50 crore for their facility at the vendor park.
WBIDC has set up a camp office at the project site where so far 2432 persons from displaced families have got their names registered. "The Government, with the help of Tata Motors, will arrange for employment opportunities for them through training and financial assistance," said Samir Rudra, the office-in-charge.
"Since we started the project four years back, there has been a steep increase in input cost but a promise is a promise," said Tata Group chief Ratan Tata after displaying his dream project at the Ninth Auto Expo.
"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 said.
"Tata Motors' engineers and designers gave their all for about four years to realise this goal. Today, we indeed have a people's car, which is affordable yet built to meet safety requirements and emission norms, to be fuel efficient and low on emissions. We hope it brings the joy, pride and utility of owning a car to many families who need personal mobility." This small car — Nano is 20 per cent shorter in length than the Maruti 800 but Tata claims it has 21 per cent more space — is powered by a 623 cc rear-mounted engine and will travel 20 km per litre. The car will cost Rs 1 lakh at the dealer-end but attract Value-Added Tax and transportation cost.
Apart from the standard version, Nano will also come in two deluxe models with air conditioning. While critics had been sceptical about the car meeting safety and emission norms, Tata said Nano will meet Bharat Stage-III emission norms and can also meet the stringent Euro 4 norms. The car has also gone through a full frontal crash test as per standard norms, he said.
Tata Motors expects two-wheeler riders to buy the car that costs half as much as those currently in the market. With just 8 people in 1,000 owning a car in India, there is huge potential to upgrade bike and scooter owners who bought about 7 million two-wheelers in 2006-07.
Commerce Minister Kamal Nath said Nano will help the common man shift from two-wheelers to four-wheelers. "It is a proud moment for India. It demonstrates India's technological and entrepreneurial ability. The car will help people move from two-wheeler to four-wheeler and it will leap-frog the two-wheeler. It fulfils the need of the common Indian who aspires to move from a two-wheeler to a four-wheeler," he said.
Tata also allayed fears expressed by environmentalist R K Pachauri and green activist Sunita Narain that a car at that price would add more vehicles, leading to higher pollution. "Pachauri will not have a nightmare and Sunita Narain can also sleep," he said.
On the reasons for choosing the name Nano, Tata said the car was about high technology and small size. He credited the development of Nano to Tata Motors' engineers, and said it was the capability and commitment to innovate that realised the dream. In fact, Tata Motors has applied for 34 patents for aggregate features, such as the two cylinder gasoline with single balancer shaft.
Asked if the company was looking to export the car as well, Tata said: "The first two-three years our focus will be India and see the Indian market appropriately addressed." He did not, however, rule out an overseas launch of the car.
Tata revealed what enabled it to cut down costs and score over the entire global auto industry. "We took the standard Maruti 800 as the base model and worked backwards on how we can reduce costs. We decided and found out that a tight package, that will mean a smaller, meaner car, lighter engine and higher fuel economy will do the trick," Tata said. "The decision to make it a rear engine driven was precisely to reduce the length of the car."
But why did other car makers miss the trick? "I cannot say for others but what is important is whether you have desire strong enough to prevent the odds from overwhelming you," Tata said.
At the site of the plant in Singur, West Bengal, where the first Nano will roll out, it is a race against time. Over 2500 people have been working in two shifts behind a guarded perimeter to complete the factory in time. Soon another shift will be introduced to make up for any backlog in work caused during the last heavy monsoon.
"Work will soon start in three shifts. Over 75 per cent work of the factory is complete and we hope by September of this year the first car will roll out of the factory,"' a top official of West Bengal Industrial Development Corp (WBIDC) told The Indian Express. A major portion of the work involving the setting up of a 230 KV substation on the project site to ensure uninterrupted power supply to the factory and the vendor park has almost been completed by ABB.
In order to save the site from inundation in the future, the state government has revived the 30-year-old Ghiya Kulti irrigation project at a cost of Rs 170 crore.
Next to the 645-acre plot that will have the main car plant, a vendor park is coming up on 290 acres to house the proposed 55 ancillary units. Already, 14 have started setting up theirs. These include Lord Swaraj Paul-owned Caparo Engineering Pvt Ltd, Rasandik Engineering Industries Indian Ltd, Rucha Engineers Pvt Ltd and Sharda Motor Industries Ltd. While Rasandik has plans of investing Rs 55 crore in the first phase of work at the vendor site, Rucha Engineering has committed Rs 50 crore for their facility at the vendor park.
WBIDC has set up a camp office at the project site where so far 2432 persons from displaced families have got their names registered. "The Government, with the help of Tata Motors, will arrange for employment opportunities for them through training and financial assistance," said Samir Rudra, the office-in-charge.
Nano sparks interest across India
At 6:46 p.m. on April 9, R. Sampath-kumar signed a check for 3,809 rupees ($78) and ordered his first car: a Tata Nano.
Bookings for the ultra-cheap car, which retails for 100,000 rupees ($2,050) plus tax and transport fees, opened last week across India. Sampathkumar, who is 30 years old and single, makes about 20,000 rupees a month ($410) as a goldsmith and says he wants a Nano for status.Automatically, women will come forward, he said, grinning.
Dozens gathered to gawk at the silver Nano sitting on a red platform with pink satin skirting at the Tata dealership in Coimbatore, a mid-size manufacturing hub in southern India. Two deejays blasted Backstreet Boys, Ricky Martin and Madonna songs, while college kids snapped photos of the snub-nosed car on their cell phones.
Despite the festivities, analysts say Nano sales won't do much in the short term to help debt-strapped Tata Motors, which is facing falling sales and is in talks with banks to refinance a $2 billion loan it took out to buy Land Rover and Jaguar from Ford last year.
Vaishali Jajoo, auto analyst at Mumbai's Angel Broking, estimated that even if Tata Motors manages to sell 250,000 Nanos a year, it will only add 3 percent to the company's total revenues.
Production constraints mean Sampathkumar won't get his new Nano until July, at the earliest. Violent farmer protests forced Tata to relocate at the last minute a factory that was to exclusively build Nanos, and the replacement won't be operational before year's end.
Customers who want to buy the Nano must pay 300 rupees for an application form, then pay the entire cost of the car or get financing from one of 18 banks Tata Motors made special arrangements with.
Tata will accept orders until April 25 and then randomly select 100,000 people who will get the first shipment of vehicles. Everyone else will have to wait. Tata will pay interest on booking deposits: 8.5 percent for people who have to wait one to two years to get their Nano, and 8.75 percent for those who hold out longer.
Tata spokesman Debasis Ray said 300,000 people had visited Tata's 400 showrooms across the country since the car went on display April 1.
Vijayakumar Jayabal, 50, a policeman who earns 12,000 rupees ($246) a month, said he wants to buy a Nano because he can't squeeze his family of four onto his motorbike.We only fit three people maximum, he said.
Associated Press
By Erika Kinetz
Bookings for the ultra-cheap car, which retails for 100,000 rupees ($2,050) plus tax and transport fees, opened last week across India. Sampathkumar, who is 30 years old and single, makes about 20,000 rupees a month ($410) as a goldsmith and says he wants a Nano for status.Automatically, women will come forward, he said, grinning.
Dozens gathered to gawk at the silver Nano sitting on a red platform with pink satin skirting at the Tata dealership in Coimbatore, a mid-size manufacturing hub in southern India. Two deejays blasted Backstreet Boys, Ricky Martin and Madonna songs, while college kids snapped photos of the snub-nosed car on their cell phones.
Despite the festivities, analysts say Nano sales won't do much in the short term to help debt-strapped Tata Motors, which is facing falling sales and is in talks with banks to refinance a $2 billion loan it took out to buy Land Rover and Jaguar from Ford last year.
Vaishali Jajoo, auto analyst at Mumbai's Angel Broking, estimated that even if Tata Motors manages to sell 250,000 Nanos a year, it will only add 3 percent to the company's total revenues.
Production constraints mean Sampathkumar won't get his new Nano until July, at the earliest. Violent farmer protests forced Tata to relocate at the last minute a factory that was to exclusively build Nanos, and the replacement won't be operational before year's end.
Customers who want to buy the Nano must pay 300 rupees for an application form, then pay the entire cost of the car or get financing from one of 18 banks Tata Motors made special arrangements with.
Tata will accept orders until April 25 and then randomly select 100,000 people who will get the first shipment of vehicles. Everyone else will have to wait. Tata will pay interest on booking deposits: 8.5 percent for people who have to wait one to two years to get their Nano, and 8.75 percent for those who hold out longer.
Tata spokesman Debasis Ray said 300,000 people had visited Tata's 400 showrooms across the country since the car went on display April 1.
Vijayakumar Jayabal, 50, a policeman who earns 12,000 rupees ($246) a month, said he wants to buy a Nano because he can't squeeze his family of four onto his motorbike.We only fit three people maximum, he said.
Associated Press
By Erika Kinetz
The Middle Class has Moved on to Tata Nano
Today’s piece is not so much about an ad as it is about an idea. Well, it is not really about an idea in the abstract. Tata’s Nano is after all a car; not just a cute little
ladybird, but an automobile that aficionados across the world are watching very seriously. Yet, the Nano is an idea, and that is exactly how it has been marketed. There are print and digital ads out for the product, but no TV ad as yet (if I have missed out on one, please point out my ignorance). These ads however are not seeking to introduce the car. The Nano arrived long before it was launched last month.
We may laugh at the Americans for their obsession with cars. Among Germans there is the joke that whereas their autobahns are world class, their schools are not. Reason: families have more cars than children! Here in India, cars have never been iconic; farmers and soldiers have traditionally captured the national imagination, not cars. Yet in 1983, Maruti inaugurated the India envisioned by late prime minister Rajiv Gandhi. The middle class, it seemed, had arrived along with a little 800-cc car. On the one hand, Maruti was a car that everybody struggled hard to fit into the
image of India they had in mind. Would it survive our roads? Was it not a matchbox, unsuited to the great Indian family? Yet on the other, the little car heralded the Indian middle classes’ tryst with the future. Up to then, they were constantly reminded of the past, tied by guilt to India’s poverty and shortage economy. With Maruti, urban
India began to aspire for things that marked the modern world. I drove my father’s Maruti out of the showroom in 1984; I know the feeling. We had finally done owning a car; we now owned a Maruti!
Tata’s Nano is the next big thing for
India. The middle class has moved on; the next wave is rushing in to fill up the ever-widening space created by India’s economic boom. People have been booking the Nano with helmet in hand; a butcher arrived to book the Nano, it is reported, with cheque filled in and signed.
Nano defines the India of the aspiring classes. Interestingly, the Nano was born of the desire and conviction (Ratan Tata’s) that it could be done, like the Konkan Railway and the Delhi Metro. In these and many other ways, the Nano will provide a new vocabulary to define India as it unfolds in the years ahead. The ‘lakhtakia’ car (the ‘one lakh’ car, as it is known in north India) could, for example, replace our rickety three-wheeler ‘autos’. We’d probably call the new avatar the Mini Cab, or better still, the Nano Cab.
So Mr Tata, having sold his story and his dream to the nation, has made the task of his brand managers easy. The car seems to be selling itself. The print ad has been visualised as green and friendly with a crayon art touch to it.
The idea I would imagine, is to keep it simple. The pitch has been made. The aspiring classes are on board. The only thing left to do is to shake Singur off, and get the assembly line in shape.
Postscript: Singur returns 9,340,000 hits on Google. Any guesses why?
Sorece: expressbuzz.com
ladybird, but an automobile that aficionados across the world are watching very seriously. Yet, the Nano is an idea, and that is exactly how it has been marketed. There are print and digital ads out for the product, but no TV ad as yet (if I have missed out on one, please point out my ignorance). These ads however are not seeking to introduce the car. The Nano arrived long before it was launched last month.
We may laugh at the Americans for their obsession with cars. Among Germans there is the joke that whereas their autobahns are world class, their schools are not. Reason: families have more cars than children! Here in India, cars have never been iconic; farmers and soldiers have traditionally captured the national imagination, not cars. Yet in 1983, Maruti inaugurated the India envisioned by late prime minister Rajiv Gandhi. The middle class, it seemed, had arrived along with a little 800-cc car. On the one hand, Maruti was a car that everybody struggled hard to fit into the
image of India they had in mind. Would it survive our roads? Was it not a matchbox, unsuited to the great Indian family? Yet on the other, the little car heralded the Indian middle classes’ tryst with the future. Up to then, they were constantly reminded of the past, tied by guilt to India’s poverty and shortage economy. With Maruti, urban
India began to aspire for things that marked the modern world. I drove my father’s Maruti out of the showroom in 1984; I know the feeling. We had finally done owning a car; we now owned a Maruti!
Tata’s Nano is the next big thing for
India. The middle class has moved on; the next wave is rushing in to fill up the ever-widening space created by India’s economic boom. People have been booking the Nano with helmet in hand; a butcher arrived to book the Nano, it is reported, with cheque filled in and signed.
Nano defines the India of the aspiring classes. Interestingly, the Nano was born of the desire and conviction (Ratan Tata’s) that it could be done, like the Konkan Railway and the Delhi Metro. In these and many other ways, the Nano will provide a new vocabulary to define India as it unfolds in the years ahead. The ‘lakhtakia’ car (the ‘one lakh’ car, as it is known in north India) could, for example, replace our rickety three-wheeler ‘autos’. We’d probably call the new avatar the Mini Cab, or better still, the Nano Cab.
So Mr Tata, having sold his story and his dream to the nation, has made the task of his brand managers easy. The car seems to be selling itself. The print ad has been visualised as green and friendly with a crayon art touch to it.
The idea I would imagine, is to keep it simple. The pitch has been made. The aspiring classes are on board. The only thing left to do is to shake Singur off, and get the assembly line in shape.
Postscript: Singur returns 9,340,000 hits on Google. Any guesses why?
Sorece: expressbuzz.com
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