Tata Nano: The tiny big idea

BlogHer Original Post

The world's cheapest car, the Tata Nano was recently launched in India, amidst much fanfare, chest-thumping, grudging acceptance and pooh-poohing. Touted as India's first "People's Car", it's basic version is small, stripped of everything including air-conditioning and power-steering, and is being offered at around $2,5000 -- Rs.100,000 for the first 100,000 buyers. I am not much into the mechanics, so here's how the NYT blog defines it:

 

The four-door Nano is a little over 10 feet long and nearly 5 feet wide. It is powered by a 623cc two-cylinder engine at the back of the car. With 33 horsepower, the Nano is capable of 65 miles an hour. Its four small wheels are at the absolute corners of the car to improve handling. There is a small trunk, big enough for a duffel bag.

This entry-level car aimed at first-time car owners has attracted a remarkable amount of interest worldwide. With auto manufacturers going south, that doesn't come as a surprise.

Tata Launch Nano The Worlds Cheapest Car

What is it about the Nano that has left people looking for words to describe what just happened?

Nano and India: What inspired the Nano? Two adults with two children on a two-wheeler: a common sight in India, where mopeds, scooters and motorbikes serve as family vehicles. According to The Economist:

 

Asia is home to nearly 80% of the world’s 315m motorcycles. About 45m of those are in India, the region’s second-biggest fleet after China, with more than 100m. Sales of two-wheelers in India are running at about 7m a year, outstripping those of cars by nearly five to one. Not even one in a hundred Indians owns a car, but one in 20 owns a two-wheeler.

It is this segment of the population who can at best afford a double-seater  -- priced around $700-$1300 --- for an entire family -- --  that chairman Ratan Tata said he wanted to make a car for. To that end, the Nano has served its purpose. Besides being affordable and providing basic security for families -- India has the highest number of road accidents in the world  -- it will give the entry-level buyer a chance to have a family night out.
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On a different, note, I hope, the Nano will keep the drivers on the road. No, seriously.
During my visit to Bangalore last year (see picture above), I was consumed by the two-wheeler explosion: they were everywhere. On the roads, weaving between cars (traffic rules, what?) and among pedestrians on walkways. If there's an inch to be had, it's taken.
Now, if more of these wonderful bikers take to the Nano, pedestrians can hopefully reclaim their precious little right-of-way. The question is, will all those single bikers want to abandon their can-drive-anywhere babies for the Nano and stay put on the road?

Nano, the U.S. and the world
: No doubt the crumbling fortunes of American automobile behemoths (check BlogHer contributing editor Jody DeVere's post) and the energy crisis have a lot to do with the world's interest in the Nano. Apart from the fact that many thought it was simply an impossibe feat.
British magazine Autocar's Steve Cropley test-drove the Nano and thought it was "an amazing car" (check video for demo). The Economist   thought the Nano was "no small achievement".
Car manufacturers from around the world have checked it out (GM's Rick Wagoner was there, too ) and the Nano bagged the 2008 Wall Street Journal Technology Innovation Award in transportation.

Of course, the criticism (and jokes) has been just as much -- it's safety standards are low, it is too small, and at a maximum speed of 65 mph, is is not suitable for American highways. Environmental concerns in India are also creeping up (more cars on India's chock-a-block urban roads?), but until India makes public transportation easy, efficient and convenient, Nano has little to worry about. As of now, it meets all environmental standards in India. So unless the government has a change of heart about its environment policy, the Nano looks good.

What's a car manufacturer to do, if not manufacture cars?

The Tata Nano is not coming to America in its present avatar (the Indian version, like most other Indian cars, is four-door and stick-shift). Tata's focus now is India and other developing countries. It has announced an European version (Nano Europa) to follow in a couple years. The U.S. is likely to be the next market. No doubt the Western version will not be priced at $2,500, but it will most likely be under the double-digit mark. And if they can maintain the current fuel efficiency of 50-55 miles per gallon, it won't be a bad bargain. Plus, as reviewers have found, the Nano is remarkably spacious for a car that tiny: it seats three people plus the driver who can be 6 feet tall after all.

That aside, could the Nano be of any value to the U.S.? That depends on what you want out of the car:

  • If you want a cheap, safe, efficient way to go from point A to point B, the American version may be worth a look. If you are looking for luxury, look elsewhere.

  • Since most American families have more than one car, a small, less powerful but highly efficient Nano could turn out to be be a good second option for the short, in-town trips: to the grocery stores, to work if it's close enough, to the kid's school, to the baseball field, etc etc.

  • If nothing else, it could make hemorrhaging American car manufacturers think. Afresh.

Why Nano matters to me as an Indian: I haven't driven it and I am big on public transportation. I do like small cars, but if the Reva (an electric car) comes in a four-door version --- I hate two-door four-seaters --- I will most likely go for the greener option.

It is the idea of the Nano that makes me smile.

For once, we did not look overseas for a solution for an India problem and then make it available to the Indian who can afford it, no matter what the real domestic needs are. Tata saw an Indian problem, spotted an Indian opportunity and offered an Indian solution.
But it has been far from easy for chairman Ratan Tata, a man with an impressive background and even more impressive inheritance. He described his Nano production experience as a "nightmare", no thanks to the local state politics. The Tata Nano has had a remarkable journey.
But he delivered and the Nano is on the shelves.

Whether it will help shed Tata Motors' losses and debts is doubtful.
But if we can look inward to recognize a problem and rack our brains to figure out a solution, if we can summon the courage to be counter-intuitive and think "impossible" is  only a spelling error, then we are on the right track.

Comments, views, opinions...

Tata Nano on Twitter

Tom Barlow at Daily Finance:

If I were one of the Big Three, I'd be calling Tata to set up a meeting. The timing is right; Tata recently shuttered a $292 million plant that was to build the Nano after facing relentless protests by local farmers angry about the appropriation of their land, and the company is deep into the raw materials business, which has tanked recently. It also recently acquired Jaguar Land Rover, which has severely stretched its finances. With a few billion of their federal handout bucks, perhaps GM or Ford could take a position in the Nano.

Maura Judkis puts together an FAQ about the Nano at U.S. News & World Report

Gaurav Live gives the skinny on the micro car

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