On the Launch of Nano - An Interview with Ratan Tata

What does the Nano — which made its official debut on March 23, 2009 —really mean for the chairman of Tata Sons, in many ways the inspiration behind the car?

That’s what Christabelle Noronha set out to discover when she met Mr Tata at Pune in late 2007 in the lead up to the unveiling of the Nano.

Ratan Tata rolls the window down and talks about the vision and conviction, the innovation and improvisation that went into creating the people’s car.

The Nano is the realisation of a long-cherished ambition. Do you feel vindicated? Are you apprehensive?

As urbanisation gathers pace, personal transport has become a big issue, especially since mass transport

is often not available or is of poor quality. Two-wheelers — with the father driving, the elder child standing in front and the wife behind holding a baby — is very much the norm in this country. In that form, twowheelers are a relatively unsafe mode of transporting a family.

The two-wheeler image is what got me thinking that we needed to create a safer form of transport.

The Nano was never meant to be a Rs1-lakh car; that happened by circumstance. I was interviewed by the [British newspaper] Financial Times at the Geneva Motor Show and I talked about this future product as a low-cost car. I was asked how much it would cost and I said about Rs1 lakh. The next day they had a headline to the effect that the Tatas are to produce a Rs100,000 car.

My immediate reaction was to issue a rebuttal, to clarify that that was not exactly what I had said. Then I thought, I did say it would be around that figure, so why don’t we just take that as a target. When I came back our people were aghast, but we had our goal.

Today, on the eve of the unveiling of the car, we are close to the target in terms of costs. We are not there as yet, but by the time we go into production we will be. This project has proven to everyone that if you really set yourself to doing something, you actually can do it.

Two-three important events have influenced the development of the car; inflation, for one. The cost statement was made three-four years back but we are holding on to that price barrier. This will definitely diminish our margins. The price of steel, in particular, has gone up during the intervening period.

A second point is that we initially conceived this as a low-end 'rural car,' probably without doors or windows and with plastic curtains that rolled down, a four-wheel version of the auto-rickshaw, in a manner of speaking. But as the development cycle progressed we realised that we could - and needed to - do a whole lot better. And so we slowly gravitated towards a car like everyone expects a car to be. The challenge increased exponentially; there was the low-price barrier, inflation, adding more features and parts to the vehicle, substantial changes in basic raw materials… What the team has been able to achieve, in the face of all these constraints, is truly outstanding.

What does it mean to me? It means that we have in us the capability to undertake a challenge that many car companies have chosen not to address or have been unable to address.

What are the innovations that have made the Tata Nano possible, from design to product finalisation?

Initially I had conceived a car made by engineering plastics and new materials, and using new technology like aerospace adhesives instead of welding. However, plastics didn’t lend themselves to the volumes we wanted because of the curing time required. Volumes mean the world in this context. When we were planning facilities for the car and working out a business plan, the business plan shown to me was looking at a figure of 200,000. I said the figure is crazy. If we can do this, we should be looking at a million cars a year, and if we cannot do a million then we shouldn’t be doing this kind of car at all.

But such a figure (a million cars) has never been achieved in the country before. If it had to be done the conventional way, it would have meant investing many billions of dollars. So we looked at a new kind of distributed manufacturing, creating a low-cost, low break-even point manufacturing unit that we design and give to entrepreneurs who might like to establish a manufacturing facility. We looked at different ways of servicing the product, at the customer's location, and through a concept adopted from the insurance industry, wherein self-employed people are trained and certified by us. And we went back to innovation in design and scrupulously took, as much as we could, cost out of the product.

We did things like make similar handles and mechanisms for the left- and right-side doors; we developed our own small engine which could sit under the rear seat, enabling us to craft a smaller overall package; we looked at a new type of seats; and we worked at cutting costs everywhere. We have put our instrument cluster in the middle, not in front of the driver. This means the same dashboard will work for a left-hand-drive vehicle. There are a lot of such innovations that are low-cost and future-oriented.

Other than emission norms and safety standards, what are the challenges, physical and psychological, that Tata Motors had to overcome to make this car happen?

There was the usual dilemma of what is basic and what is nice to have. A basic car may not have all the niceties its fancier cousins sport, and when you’re looking at saving money on every single bit of the car — even parts that cost as little as Rs20 — you keep facing these dilemmas. Hundreds of such dilemmas have risen.

However, we were always conscious that there should be no quality stigma attached to the buying of this product. One thing we were clear about: this was never going to be a half-car. Nobody wants a car that is less than everybody else’s car. Our car may have a small engine and certain limitations in terms of being basic, but that does not make it inferior.

The Tatas have been on the front pages constantly of late-- what is it like being in the middle of it all?
Embarrassing and unpleasant. Whenever you are on the front page, you are also - each time, and more so in India than elsewhere in the world - creating detractors and critics. For every action there is some kind of reaction, somebody who is hunting for something to criticise. And most often it is the reaction that people remember. This is all the more embarrassing because we are not a Group that seeks publicity.

If you look at the coverage that has happened, you cannot fail to notice how the low-cost car has been turned into an issue of congestion, of pollution, of safety. Initially it was all about why a car at this cost was simply not possible; that talk is long gone, only to be replaced by these 'new' concerns. We are not really talking about how it will change the way people live or transport themselves, what their aspirations may be.

Ideally, I would really wish we didn't have the visibility and the media publicity because we haven't sought it.