(Credit:
Hem.com)
Europe loves the VW Beetle, the Renault Twingo, and the Smart. The U.S. has the Mini and will finally get the Smart, too. And recently India proudly presented the spiritual successor to all of these--the $2,500 Tata Nano, a "people's car" that is widely gushed about, not only for its surprisingly slick design but also for its innovations.
In recent years, ecoconcerns, design savvy, and an (urban) willingness to quest for practicality have fostered the trend toward specialized cars that are as small as the niches they serve. While the idea of a small car is not new, in the case of the Nano, and that's an interesting addendum, the miniaturization of the product goes along with a miniaturization of price, development process, and distribution model. The Nano is the world's new "cheapest car," it was developed and designed by an off-site micro-organization, and it operates with a decentralized distribution model that allows the suppliers who assemble the car to also sell and service it directly to the consumers. What you can learn from Tata: shrink the product, shrink the feature list (no frills!), shrink the development team (no red tape!), shrink the price (ultra low cost!), and shrink (localize!) assembly and distribution. Think small, score big.
In fact, nano is the new big. Language is always a good indicator of cultural shifts. There is talk of the "Nano-effect," of "nano-sphere," and the magazine Nanowerk observes that, "Over the course of the last 12 months, the LexisNexis database of newspaper articles records 239 stories referring to nanotechnology in the British press. In the same period there have been 239 stories referring to 'iPod' and 'nano'."
India's Economic Times even proclaims the "coming Nano Age:"
"Small is getting a big play. Part of the push is coming from companies eager to stuff cell phones with value add-ons and another is about demonstrating technology that is smart, simple, small and beautiful. (...)Nanotech products or small, nifty gadgets may not be cheap, as the emphasis is not on price cutting but efficiency at a small scale. Though it remains to be seen whether, the Tata Nano, a nanotech medical device or a pocket printer, will set the cash counters ringing."
(Credit:
Tata Motors)
99 years after the Ford Model T, the Tata Nano has been announced in India for 100,000 rupees, or about $2500. And you know what? It looks amazingly good. I was completely expecting a Yugo ugly box, but you could drop this 10 foot long car into an urban street in Europe (the most competitive subcompact market on the planet) and it would fit right in. It looks amazingly refined and interesting - heck, it looks better than budget models selling for many times the price from most mainstream manufacturers.
And they have a website that is fairly Web 2.0, with customer feedback, a conversational letter from the chairman, and colored gradient boxes to complete the look.
It also raises some interesting possibilities for domino effects -- more on that in a moment.
The car has a 2-cylinder engine and reportedly gets 54mpg. It only creates 33hp, and tops out at 65mph. Of course, if a lot of them are sold then street congestion will be so bad that 65mph won't be a serious limit and 54mpg is unlikely in stop-and-go traffic. Ecological concerns are of obviously a major issue if hundreds of millions of new buyers suddenly take to the car. Supposedly it produces less emissions than the mopeds that poor Indians currently ride (the next cheapest car is twice as much), since it uses a 4-stroke not 2-stroke engine. Nevertheless, it probably has worse mpg, requires far more energy and resources to fabricate the Nano than mopeds, and takes up more space on the road so density is decreased (so less efficient).
But the Nano has some strong upsides of comfort and safety also:
Mr. Ratan N. Tata [Chairman of the Tata Group] said, "I observed families riding on two-wheelers - the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby. It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family. Tata Motors' engineers and designers gave their all for about four years to realise this goal. Today, we indeed have a People's Car, which is affordable and yet built to meet safety requirements and emission norms, to be fuel efficient and low on emissions. We are happy to present the People's Car to India and we hope it brings the joy, pride and utility of owning a car to many families who need personal mobility."By adopting the term "the people's car" Tata is explicitly referring to the VW Bettle, a similarly inexpensive car that was designed to help bring affordable mobility to the German population, and which went on to become a cultural icon worldwide representing freedom and independence (despite its Nazi roots).
And while the Beetle is an obvious reference, the Ford Model-T is a more accurate forecaster of the future the Nano may bring. Just as trains and inexpensive cars like the Model-T led to transformation of population centers, massive shifts in attitudes toward city and rural areas, flexibility of employment and education, broadening of social perspectives through travel, and shifts in family dynamics and roles, the Nano may bring the same to India.
From a business perspective, Tata has had to do some radical things to achieve the $2500 price. They have worked closely with component suppliers and brought them close to the assembly plant to reduce costs (like Dell does).
The design team practiced a concurrent engineering model with many iterative physical prototypes, working in a skunk works fashion away from the "hidebound" practices of the larger Tata organization, and collaborated early on with component vendors to sort through problems.
Like the manufacturing line of the Model-T which had far reaching implications for the American manufacturing industry (and economy), if other Indian companies can harness the lessons of Tata's Nano, we will see a transformation of the entire country in the next decade even beyond what is already coming.
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