Tata Nano

The Tatas should give Free 10 lakh Nanos

2008-01-15T08:46:00.000+05:30

The Tatas should give 10 lakh Nanos, the Rs 1-lakh car unveiled by the group's chairman Ratan Tata in Delhi, for ‘free’, Trinamool Congress supremo Mamata Banerjee demanded on Saturday.

"Tatas were given land valued at Rs 1,000 crore free, as also Rs 135 crore in incentives such as power and water. Everything is free. After getting so many things free, the Tatas should give 10 lakh cars free," she said.

"Instead of talking tall in Delhi and showing a car made in Maharashtra, I would understand if he unveiled it at Singur," she said without naming Ratan Tata.

She reiterated her demand that the land of unwilling farmers at Singur, the site of the Tata Motors plant, which will manufacture the Nano, be returned.

There was also 'no question' of allowing the Tatas to begin production of their small car at Singur, she said.

Stating that she was neither a business competitor nor a consultant, Banerjee said, "our job is to take care of public interest. Anybody can do whatever they like, but without causing any inconvenience to the people."

Nano giving two-wheeler industry sleepless nights

2008-01-15T08:44:00.000+05:30

Tata’s Rs 1-lakh car Nano will probably fulfill the dream of millions of two wheel owners aspiring to upgrade to a car. But will this be bad news for the two-wheeler manufacturing industry? Yes, Nano can spell mega trouble for the bike makers.

According to industry estimates only 10 per cent of the seven million strong two-wheeler buyers would prefer an entry-level mini car when it hits the road later 2008.

TVS Motors Senior VP H S Goindi says, “There is no threat, as cost involved in maintaining a two wheelers is very different than maintain a car, and I don’t there will be a lot of attrition.”

Rs 1-lakh Nano may have given a lot of low income group Indian a chance to own a car, but more than fixed price, it's the variable price of maintenance, fuel and upkeep, where the two wheel segment has an edge.

While Nano has a mileage of 20 kmpl, an average bike would give between 50 to 120 kmpl.

In addition, the Rs 600 that you spend every month for car maintenance can last you three months in case of a bike. Bike manufacturers believe the Nano may just compliment the two-wheeler already available with the family.

And even though, a car is much more convenient, safer and a comfortable option than a two wheeler, in a price conscious country like India, there will always be a place for a two wheeler.

A sturdy Fabia tough on pricing

2008-01-15T08:42:00.000+05:30

Czech carmaker Skoda makes an attempt at the volumeladen compact car segment in India with the launch of the ‘Fabia’ that it hopes will help it get a foothold in the mass market. Though promising a fresh dimension and a somewhat different look to the premium compact segment, Fabia seems to be missing out some key areas that make its attempt a weak one and would leave much to be desired.

First, is pricing, the most critical element in India. While Skoda seems to be trusting the premiumness of its brand and the sturdiness of the vehicle, it seems to be on a difficult wicket right from the word go as. It has promised petrol variants soon, but it
only has the 1.4-litre diesel versions for the moment and cost more than possible contenders like Suzuki Swift and Hyundai Getz.
Though it comes with tubeless tyres, climate control, power steering, power windows and four-way adjustment for the steering, all this seems to be a little too less to pull droves towards the model.
With very little localisation, the car could be a difficult to maintain with spares expected to be expensive.
Apart from the base version ‘Fabia Classic’, the middle-level version ‘Ambiente’ comes with good features like ABS, alloys, fog lamps. The top-end version of the car, ‘Elegance’, promises a sun roof, apart from the ABS and airbags and the 6-CD changer.
Skoda also needs to do some homework to make good some of the features it offers on the car. Like the reverse parking sensors do not seem to working when we tested the car and somewhat failed to do their job — that is assist in parking safely. Again, despite the high pricing, the car does not impress much with the interiors. A touch of wood would have done
good to add the premiumness Skoda wanted to attach to the brand.
Also, Skoda seems to have forgotten to provide a good ground clearance to the car and just provides for a metal plate below the engine to protect the car from the bumps, that are so-very-common in India. The engine also sounds noisy though the car remains sturdy and smooth even at speeds of 165 kph, which we tried. The ABS comes in handy and there seems to be little trouble in screeching to a halt suddenly if the need arises with the ABS coming in handy.
At a high price and with a good sturdy vehicle, the company would have done good by providing features like cruise control.
FAB SPECS
Three diesel variants priced from Rs 7.04-Rs 8.5 lakh (exshowroom Delhi)
Powered by a 1.4 litre TDI diesel engine
Standard version comes with features like tubeless tyres, dual airbags, climate control
Petrol versions yet to be launched and expected to be Rs 50,000 cheaper than diesel -Times of India

Nano will drive Tata Motors to top position

2008-01-15T08:36:00.000+05:30

According to a study by German research firm CSM World Wide, Tata Motors' Rs one lakh car 'Nano' will propel the company as the country's biggest light vehicle manufacturer by 2013.

Tata will sell about two lakh units more than Maruti Suzuki, which is the market leader in the low-cost, small car segment, by 2013.

Tata Motors would roll out nearly 1.2 million light vehicles (LVs) per annum in the next five years, of which Nano alone would contribute more than 50 per cent.

"Nano will help Tata in increasing its stake in the segment as it is expected to sell more than six lakh units per annum by 2013," CSM World Wide CEO & President Craig Cather told PTI.

"Ultra low-cost vehicles like Nano will also help in bringing new buyers to the market," he added.

In the next five years, Tata Motors, Maruti Suzuki and Hyundai will be able to retain the top three position in the LV sales in the country at 12, 10 and four lakh units respectively, the study projected.

By 2013, India would also become the largest producer of light vehicles in the world with an additional capacity of 22 lakh units per annum.

India may sell around 45 lakh vehicles per annum in the segment in the next five years, contributing around 16.7 per cent to the total global sales, followed by China at 12.3 per cent, the study said.

Are you ready to buy the new Tata Nano?

2008-01-13T09:55:00.001+05:30

The Chairman of Tata Sons, Ratan Tata unvieled the much-awaited Rs 1 lakh car, Nano at the New Delhi auto expo.

Tata says that the car has passed all safety tests. The car is eight per cent smaller than the Maruti 800 outside, but 21 per cent arger on the inside.

So how much will the car actually cost you?

Tata plans to give the car to the dealers for Rs 1 lakh. You will have to pay a value added tax or vat of Rs 12,500, a road tax of Rs 4,000 and an insurance of about Rs 3,500.

And all of this total up to Rs 1,20,000 on the road price.

But if you take a car loan, how much will it cost you in EMI's?

If you get a loan of Rs one lakh for five years then you will have to pay about Rs 2,200 per month.

Nano versus Maruti 800 - which is the winner?

2008-01-13T09:53:00.001+05:30

There is no doubt that the mono-volume design of the Nano is a sure winner over the boxy Maruti 800, which has not been helped by a series of facelifts over the last 2 decades.

Size does matter

The Nano is 3100 mm in length, 8 per cent shorter than the Maruti 800, but the breadth and height of the car tell a different story. The Nano at 1500 mm is 4 per cent wider than the 800 and, at 1600 mm, is 14 per cent taller.

The Tatas also claim the car is 21per cent bigger than an 800 when it comes to inside space.

Who has the power?

The Maruti runs on a 3-cylinder 796 cc engine, bigger and possibly smoother than the 623 cc 2- cylinder heart of the Nano.

The 800 churns out 37 BHP, while the Nano tops at 33 BHP, at 11per cent less power.

Although the Tatas were tightlipped about speeds, the Nano’s top speed is likely to be lower than the Maruti 800’s, which can hit 120 kph, when pushed.

Fuel efficiency

The Tatas say that the Nano will give 20 km/l which is about as much as the Maruti 800 delivers when driven well.

The real test for the Nano would be to match the survivability of the Maruti 800 on Indian roads, but the Tatas will cross that bridge when they launch the car later this year.

Nano rules Autoexpo, India, amid Singur protests

2008-01-13T09:51:00.001+05:30

New Delhi The disputed Tata Motors factory site in West Bengal's Singur witnessed protests on the same day the company unveiled the world's cheapest car in the capital.

The Trinamul Congress-backed Krishi Jameen Raksha Committee or the Committee to Save Farmland burnt a dummy version of the people's car to express their anger.

“Our land was forcibly taken by us. We will not allow Ratan Tata to come in Singur,” said Trinamul leader Becharam Manna.

A section of temporary workers at the project site also protested, hampering work at the 997-acre small-car plant site. They were protesting the company's decision to downsize workforce.

Skoda Fabia makes an impression

2008-01-13T09:48:00.001+05:30

So moving on from Nano, one car that made an impact in the Auto Show was Skoda’s Fabia.

Former ace rallyist Renuka Kriplani while talking about Fabia said that it had seen a lot of hit and misses because Skoda had been announcing its launch for the last five years.

Comparing the price of the Fabia with the Maruti Swift, Kriplani said if one was looking for a better value for money then investing in the Swift diesel would be a better bet.

However, even though a little expensive, Skoda was offering parking sensors, allow wheels, air bags and a sunroof so it was certainly a good bet for a buyer.

“It has the most fabulous built and gives the feel of a big car. It is very airy and has an extremely large boot,”

A Nano leap into the future

2008-01-13T09:37:00.001+05:30

He’s been hailed as the world’s foremost management thinker. He revolutionized the way CEOs looked at the market through his bestseller ‘The Fortune at the Bottom of the Pyramid’. And now, C K Prahalad writes exclusively for Sunday Times on the Nano launch.

Tata Nano represents an important inflection point in the global auto industry and in the evolution and maturation of Indian industry. There is great excitement around the world because Tata Motors has introduced the global auto industry to a whole new consumer segment. This emerging consumer base around the world will be a major engine of global growth.
However, this growth will not materialize without a fundamental rethinking of the price-performance (value equation) in the entire industry. I believe that Tata Nano will spawn a new debate about manufacturing methods, use of materials, energy efficiency and transportation.
In India, it lays to rest the skeptics who as recently as five years ago assumed that India cannot compete in manufacturing. Yes, Indian engineers, given the right challenges and leadership can out-innovate and out-engineer others. Seldom does a single product introduction challenge the received wisdom in the industry so radically.
Tata Nano also sheds light on how to leverage emerging markets as innovation hubs. We can constantly complain about constraints. We can also use constraints as levers for breakthrough thinking. I call this process of constrained innovation as working within the Innovation Sandbox. Consider Tata Nano. It starts with clear, self-imposed constraints.
1. Price : Rs 100,000 ( a significant change from the lowest cost car in India and elsewhere in the world. A 3X improvement. This constraint is also critical to create a new consumer market—the emerging middle class in India (and India-like markets).
2. Scalability: This market is large and scale is critical both to meet the price-performance targets and to satisfy the customer base (Think Model T again). 3. Aspirational: The design and features must be such that is aesthetically pleasing and desirable. It must be modern. It must represent smart basics and must not crowd the offering with features that do not represent core value to the customer base.
4. Resource efficient: It must be efficient in the use of resources—capital, raw materials and energy.
Now consider these four principal constraints as the boundaries of a sand box. Allow managers to innovate within this sand box and not violate these self-imposed constraints. I am sure that Tata Nano represents thousands of small and significant innovations within these constraints. It is this approach to innovation—embracing constraints and leveraging them for breakthrough innovation—that got us the Rs 100,000 car, in spite of the dramatic increases in the price of raw materials.
I consider Tata Nano as an innovation platform. Of course, the features and functions will evolve rapidly based on experiences of consumers and feedback from the market. Both the company and consumers will learn. The challenge for the company and all associated with it is to rapidly and continuously innovate around the platform as an ecosystem of suppliers, and dealers.
The power of this innovation to shape the global auto industry is forcing a debate already; including in India. What about pollution? Congested roads? Poor infrastructure? I think this is the wrong starting point for debate.
We should ask ourselves: What if we devoted the same energy and ingenuity to solving the problems of discipline in traffic management? In energy efficiency? These problems may lead us to breakthrough innovations. But I am glad that the debate has started. That is a good sign. This innovation is serious.
But now, let us celebrate. I just want to say: Ratan, what an extraordinary New Year gift to India and the world! To ordinary people! Ratan Tata, Tata Motors, and all the suppliers and dealers deserve our thanks for rekindling the innovative spirit of India.

Jaguar Stroke

2008-01-13T09:29:00.001+05:30

India cheers for Nano but green lobby alarmed

2008-01-13T09:27:00.001+05:30

NEW DELHI (AFP) — Bowled-over Indians showered accolades on the Tata Nano, the world's cheapest car, Friday calling it a must-buy and a "one-in-a-billion coup," drowning out the grave concerns of environmentalists.

The no-frills 2,500-dollar vehicle from Tata Motors, unveiled amid huge hoopla in New Delhi on Thursday, could revolutionise how millions in India and elsewhere travel, its developer and industry watchers said.

Although the minicar which seats up to five is yet to hit the road, many in India seemed to agree, most notably a rah-rah media that, the car was a triumph of Indian engineering.

"Tata reinvents the wheel," crowed a headline in the Times of India daily. "Pulls off a one in a billion coup."

The NDTV news channel dubbed the car a "hit," although the car will only face the real test of chaotic Indian roads in the second half of this year.

Middle-class Indians seemed to agree.

"It's time now to dump my scooter," Deepak Srivastav, a government worker, told the Hindustan Times.

The Nano -- so named company chairman Ratan Tata said because it "connotes high-tech and small size" -- features a two-cylinder 623 cc, rear-mounted engine with a top test speed of 105 kilometres (65 miles) an hour.

Derived from the Greek word for "dwarf," it is also a measure that means one part of a billion in what appeared a nod to India's billion-plus population.

The car whose cute appearance defied pre-launch predictions it would be little more than a "motorised bullock cart" will get 20 kilometres to the litre or 50 miles to the gallon and will also meet strict Euro IV emission norms.

"It is green, it is global, it is Indian," lauded the Hindustan Times on Friday, speculating that the car could "turn out to be one of the more important milestones in the history of automobile manufacturing."

Animated youngsters told television channels they planned to buy the car as soon as it was available.

"I plan to own this car by December, drive around Delhi, have fun with my friends, give them a ride," college student Devika told the NDTV news channel.

"I need that car."

"It's a good-looking car, it's a great achievement," said Indian auto analyst Murad Ali Baig.

Tata himself, likened by India's media to US automobile pioneer Henry Ford, compared the importance of the vehicle, nicknamed the "People's Car", to the first powered flight by the Wright brothers or the first lunar landing.

But in spite of the reams of praise, some remained unconvinced.

The head of the UN climate panel that won the Nobel Peace Prize last year indicated he would have preferred to see Tata unveil the "People's Bus."

"In my view, this represents a bankruptcy of policy as far as transport options are concerned," said Rajendra K. Pachauri.

In many Indian cities, cars far outnumber public transport options. India's capital -- where the country's biggest car show is underway -- has 1.6 million cars and 8,000 buses for its 14 million residents. Traffic crawls at rush-hour.

"If our roads are going to be flooded with these cars by a few million each year, what is that going to do? Every car that goes on the road is going to use road space. Congestion and air pollution are twin problems," said Pachauri.

"Why not improve the quality and reliablility of buses?"

Exclusive Picture of TATA NANO

2008-01-13T01:04:00.000+05:30

Tata Nano to dampen demand for bikes

2008-01-13T00:26:00.000+05:30

Two wheeler prices are likely to slide and banks' car loan portfolios are set to rise from October when millions of consumers start buying world's cheapest car made by Tata Motors, a survey said on Friday.

The survey on 250 chief executives by the Associated Chambers of Commerce and Industry of India also said second-hand car sales would fall by a minimum of 35 per cent.

Tata Goup Chairman Ratan Tata on Thursday launched 'Nano' costing only Rs 100,000 -- less than half the price of Maruti Suzuki's cheapest variant M-800 but slightly costlier than the latest Royal Enfield bike of Escorts.

Assocham said a vast majority of CEOs believe that Tata Motors has given a stiff challenge to two-wheeler manufacturers, who may be forced to cut prices by 20 per cent to maintain their market size.

Banks' loan exposure to the four-wheeler industry would go up by 25 per cent from October 2008 after Nano cars roll down on roads, it said.

A good percentage of respondents, however, said congestion on roads would multiply which will put pressure on governments to improve the existing road networks.

About 200 CEOs said states should exempt the 12.5 per cent value added tax on the small car in public interest.

Ratan Tata and the Tata legacy

2008-01-13T00:21:00.000+05:30

Ratan Tata turned 70 (December 28, 2007). we take you through a nostalgic journey of the Tata Group through the ages.

Ratan Tata was born to Soonoo & Naval Hormusji Tata on December 28, 1937. He was brought up their grandmother Lady Navajbai after his mother moved out following a troubled marriage. He studied at the Campion School in Mumbai.

At the age of 15, he moved to the United States for further studies. He completed his graduation from Cornell University with a degree in Architecture and Structural Engineering. He has also completed a Advanced Management Program at Harvard Business School.

Despite his wealth, Tata always kept a low profile. During his stint in the US, Tata had no qualms in doing odd jobs, he even washed dishes!

He joined the Tata Group in December 1962. In 1991, after more than 50 years at the helm, JRD Tata stepped down as the chairman of the Tata Group. Taking over from him was Ratan Tata, his nephew.

In 1998, Ratan Tata launched the Indica, which is India's first indigenously designed, developed and manufactured car. Pooh-poohed for getting into the passenger car segment, Ratan Tata turned the tables on the naysayers within a few years. Tata Motors' Indica and Indigo is two of the hottest selling cars in India.

Today, Tata is an indispensable part of the Tata group, striving for more glory year after year. If 2007 would be remembered for his acquisition of Corus, the biggest acquisition in the history of India Inc. He has also bid for Ford's marquee brands: Jaguar and Land Rover.

His pet project -- the Rs 1 lakh People's Car -- likely to be launched in mid-2008 is also certain to shake up the Indian car industry.

Ratan Tata has also initiated the restructuring of the vast Tata empire to reduce hierarchy, focus on profitable operations, and increase efficiency. The group is managed through holding company Tata Sons, which controls the Tata brand.

The Tata Group comprises 98 operating companies in seven business sectors: information systems and communications; engineering; materials; services; energy; consumer products; and chemicals.

Why criticising the Rs 1-lakh car is wrong

2008-01-13T00:20:00.000+05:30

Tata Motors will unveil its Rs 1-lakh (Rs 100,000) car at the 9th New Delhi Auto Expo on January 10. The commercial launch of the car is slated for the second-half of 2008. Both events are keenly anticipated by India's burgeoning middle class, in general, and the auto industry, in particular.

Not since the launch of the Maruti 800 in 1983 has a new car model been more keenly awaited. And just as the Maruti 800 before it, if the Tata Rs 1-lakh car is commercially successful, it will alter the passenger car market in India beyond description.

The then Maruti Udyog [Get Quote] (now Maruti-Suzuki) rode Maruti 800 to market dominance in India and Tata Motors [Get Quote] hopes to do the same with its 'people's car.' Besides, Tata Motors also hopes that its new product, aimed at new consumers and new markets, will propel it to being an important player in the global passenger car market.

It is worth noting that the Rs 1-lakh car and Maruti 800 are not vastly different in terms of performance specs, with the former marginally better than the latter -- it is somewhat less powerful, but somewhat more fuel efficient and less polluting.

But if there are similarities between Maruti-Suzuki's 800 and Tata Motor's 1-lakh car, there are important differences as well. At about little more than twice the price of an average Hero Honda motorcycle and 1.5 times the price of a Bajaj Chetak scooter, it will draw in buyers who would are currently priced out of the passenger car market.

The fact that it is so much cheaper than Maruti 800 (it is about half the price) is in part because it is engineered differently than the small cars currently in production the world over.

Changing industry dynamics

As a general manager at Ariba, a Tata vendor for the Rs 1-lakh car noted¹, "There are so many legacy costs built into a design, and trying to engineer those out is difficult . . . It's better to start with a clean sheet of paper and engineer low costs in."

It is cheaper also because it will be produced differently, using dealers as a part of a distributive manufacturing network. In other words, it is based on a different production and business model than currently in play in the automobile industry.

Little wonder then that a senior executive of carmaker Mahindra & Mahindra said, if successful, it would "change industry dynamics²." Of course, all this will come to naught if it is not commercially successful.

Disruptive innovator

But if it is, Tata Motors' Rs 1-lakh car has the potential of being a disruptive innovation³. And disruptive innovators are viewed with a mix of both anticipation and trepidation because they change competition benchmarks and therefore while they create a new opportunity they also have the potential to cause the demise of some existing players.

According to Robert Bosch, a German firm that is the world's largest supplier of automotive components, between now and 2010, globally the small car market will grow at 5% p.a. which is twice the rate of growth of the industry as a whole⁴.

A disruptive innovator in the industry's most dynamic market segment -- not surprising then that Tata Motors' new offering has evoked so much interest among industry majors.

Renault-Nissan and Toyota have announced plans to build small cars, though both are as yet on the drawing board. Perhaps the most interesting response has come from Suzuki, the current market leader. After having pooh-poohed the idea of Tata Motors' Rs 1-lakh car, it seems Maruti-Suzuki is in the process of making a competing product⁵.

Tata Motors' Rs 1-lakh car has been greeted with a great deal of scepticism, both, at home and abroad. Somewhat unusually, it has been the international business press that has been less sceptical and more open to the idea that Tata Motors might actually pull-off the Rs 1-lakh ($2,500) car and trigger a 'paradigm-shift,' at least at the bottom end of the market.

'Tax it like crazy'

More recently, as it became clear that the Rs 1-lakh car was on schedule, it has faced a barrage of criticism from environmental groups like the Centre for Science and Environment (CSE) that have argued that the success of the Rs 1-lakh car will put enormous strain on inadequate urban road infrastructure and worsen India's already serious problem of urban vehicular pollution.

They argue that the focus should be on developing urban mass transit systems rather than on cheap modes of personal transport. According to Sunita Narain, director of CSE, the solution is not to ban the Rs 1-lakh car but to "tax it like crazy until it (India) has a mass transit system that can give people another cheap mobility option.⁶"

The environmentalist position found the backing of an influential opinion maker, Thomas Friedman (New York Times columnist and author of The World is Flat and The Lexus and the Olive Tree). In a New York Times op-ed he argues that "If it (India) applied itself to green mass transit solutions for countries with exploding middle classes, it would be a gift for itself and the world. To do that it must leapfrog . . . It will also be an India that gives us cheap answers to big problems -- rather than cheap copies of our worst habits."

It is not very clear what Friedman means by leapfrog. Does he mean not use cars as a form of mobility? Or does he mean tax the Rs 1-lakh car "like crazy" so that the market does not grow until a mass transit system is in place? One thing, however, is quite clear: he does believe that the Rs 1-lakh car is a cheap copy of some American car (or idea).

Yes, we must invest in mass transit systems. . .

Before responding to Friedman's view on the Rs 1-lakh car, I should make clear that I wholeheartedly agree with one part the environmentalist position: the need to invest in efficient, affordable and green mass transit systems.

Indeed given urban India's high population densities and the increasingly urgent problem of global warming, this is not a matter of choice but a necessity.

More importantly, because of the presence of all kinds of indivisibilities and coordination problems, the market, left to itself will not deliver this result. Therefore all forms of democratic pressure should be brought to bear on central and state governments to ensure that public policy (including taxes and subsidies) and public and private investment work in concert towards that end.

. . . but 'taxing like crazy' isn't the answer

But I do not think taxing small cars "like crazy" is a coherent part of that policy framework. I will return to this a little later.

That said, unlike what Friedman says, the Rs 1-lakh car is anything but a cheap copy of America's worst habits. In absolute terms it is undoubtedly inexpensive: it is the cheapest car ever made. In 2007 US dollars, it is less than 15% the cost of a Model T Ford and less than 25% that of the VW Beetle⁷. But it is still more than three times India's per capita income whereas the cheapest car in the US market (a Chevrolet Aveo costing approximately $11,000) is less than 25% of US per capita income.

In relative terms the Rs 1-lakh car is not inexpensive in India. This is no 'bottom of the pyramid' product.

Cheap car does not mean low in quality

But the fact that it is the cheapest car ever made does not mean that it is either low quality or a knock-off copy of some high-quality variant. As a senior Robert Bosch executive noted, "Low-price vehicles are not vehicles of inferior quality equipped with the most basic components⁸. . . They are inexpensive technical solutions produced using state-of-the-art components ." And low costs have been engineered into the car by designing the car afresh and not by using cheaper slimmed-down versions of existing components and designs.

It is a globally envisaged Indian manufacturing response to Indian needs, engineered for Indian conditions and markets. Indeed, in my view, given environmental concerns and urban densities, India's mobility requirements are perhaps best met by a combination of mass transit systems and small cars like the Tata 'people's car.'

Therefore to tax the small car "like crazy" so that the market does not grow until an efficient and affordable mass transit system is in place is short-sighted in the extreme. It is odd that both Sunita Narain and Thomas Friedman talk of taxing the price-elastic small-car segment of the passenger car market whereas saying nothing about taxing the more price-inelastic relatively larger car segment.

Odd because despite protestations to the contrary, taxing the price-elastic small car "like crazy" will effectively kill it, and leave us producing a worse product both in terms market growth and the environment.

As it happens, even though I am sure Friedman did not intend it to be so, taxing the small car favours relatively inefficient American car producers. American auto makers have never understood the small car and therefore even today are not a serious presence in the Indian market.

But the Rs 1-lakh car, if it is commercially viable, being potentially a disruptive innovator, will compound the current competitive dis-advantage of American auto makers in small cars and constitute a very serious entry-barrier into one of the most dynamic segments of the car market.

Don't kill the car

On the other hand, if we tax and kill the small car, then there is still a not so marginal market for those gas-guzzling cars that GM and Ford produce here in India.

Be that as it may, perhaps the best solution for an efficient and environmentally friendly mobility policy for India is to focus on an affordable mass transit system and on small cars (including the Rs 1-lakh car).

I would therefore say tax anything above 1500 cc "like crazy," but not to death. Force green emission conditions and continuously raise the fuel efficiency bar and above all invest in cheap and comfortable mass transit systems.

And, if it succeeds in the market, let the Rs 1-lakh car thrive, as another Indian contribution to "inexpensive technical solutions produced using state-of-the-art components."

And to Thomas Friedman say, thank you, but no thank you. His talents of persuasion are perhaps better utilized trying to convince the Bush administration to allow California to impose its own, stricter, emission norms rather than telling us to tax the Rs 1-lakh car to death.

2008-01-13T00:18:00.000+05:30

Ratan Tata, chairman of the Tata Group, feels that after the successful launch of his dream project -- the Rs 1-lakh car -- will ideally be the nice time for him to retire from active business life, a media report said in London.

"In an ideal world, after the small car has been launched
and is successful, that would be a nice time for me to exit," Tata told the Financial Times newspaper.

Tata Nano - The little car that might change the world

2008-01-13T00:05:00.000+05:30

TATA NANO People's Car

TECH SPECS

Length: 3.1 m
Width: 1.5 m
Height: 1.6 m
To seat: 4
Engine: 643cc, 2-cylinder, all-aluminum
Power: 33 BHP
Position: Engine, battery at rear end
Boot: In front
Fuel: Petrol
Fuel injection: MPFI
Fuel consumption: 20 kmpl
AC: Only in deluxe version
Music system: No
Passenger side mirror: No
Power steering: No
ABS/airbags: No
Price: $2500 at dealer + VAT + transport cost. Base version approximate on-road price: $3000
Tyres: Tubeless tyres
Body: All-steel
Safety features: Crumple zones, intrusion-resistant doors, seat belts, 2 A-Pillars
Suspension: Independent front and rear

The ultra-secret people's car for India - the Tata Nano - is here. How will this car change the way India, and the developing countries drive?

BY OUR AUTOMOBILE CORRESPONDENT
10 January, 2008

It will help India's huge two wheeler popular upgrade to a four-wheeler
Very affordable - priced a bit higher 2 125cc motorcycles in India
If popular, will clog roads in the cities
Establish a huge volume market that cannot be ignored by any large car manufacturer
40 patents by Tata Motors during development

Here are the pictures from the unveiling of the Tata Motors' small car to be sold at a price of US $ 2500 approx. (Rs. 1 lakh.). The Tata Nano was unveiled at the 9th Auto Expo in New Delhi, India.

The Nano is disruptive tech - make no mistake.

The world's car manufacturers have expressed all shades of opinion in the run-up to the Tata Nano. Suzuki has said that it is impossible, VW said it is not what they want to do. DaimlerChrysler said they think it is an important market Tata is trying to tap.

There was no way Tata could design a car the conventional way. So went at it on a clean slate. And seems to have pulled it off. The rear engined car will have a small boot for luggage storage in the front. In the process of developing the Nano, Tata Motors has added 40 patents to its kitty.

This car, if it becomes a hit, will make every auto company change the way it works and look at the volume market. Not only in India, but in entire Asia and every third world country. Offering mobility for the masses is big business. The VW Beetle did that, and so did Henry Ford.

Measurements of the Nano

3.1 metre length
1.5 metre width
1.6 metre height

Environmental impact

In India, a car like this can crowd the streets, forcing the government to improve infrastructure - and as the evolution of the Western industrial society demonstrates, affordable cars can be a major force for change.

But till that happens, this is a car that can seriously crowd the streets - and make life a bit tougher in the short-term.

Is it a real car?

The car will have a two-cylinder 624-cc petrol engine with 33 bhp of power. It will also have a 30-litre fuel tank and four-speed manual gearshift. The car will come with air conditioning in the deluxe version, but will have no power steering.

But yes, it is a real car. Production is expected to be 250,000 units in the first year. Despite the puny 33 bhp engine, it has acceleration and speed comparable to the existing people's car of India, the approx US $ 5000 Maruti 800.

I know, that's pathetic power by American and Western standards. But Indian maximum legal speeds are way lower than them - and Tata Motors anyway claims that the car is as fast as the Maruti 800, India's original People's Car that changed things a couple decades back. And there are a million or more of them on the streets of India already.

The car will have front disk and rear drum brakes. The company claims mileage of 22 kmpl in city and 26 kmpl on highway.

The $ 2500 is the dealer price - the actual price on the road might be approx Rs $3000.

The car would be commercially launched in the second half of 2008 and would be produced at the Singur plant in West Bengal.

The car launched is being avidly watched by the auto industry around the world.

Safety

Passes crash tests. Side impact test yet to be done, but Tata is confident about it. It has 2 A-pillars on one side to better meet safety norms.

No airbags. Airbags are still not a required feature in India.

But you have crumple zones, intrusion-resistant doors, seatbelts and anchorages.

A four wheeler is safe than a scooter. So to begin with, the huge two wheeler population of India gains a safety benefit. But will it pass the safety requirements of a large car or even a high technology compact? Unlikely. But that is not the objective - it is to improve the safety of four-member families like this one that rides scooters and at risk every day.

And so here it is. If Tata Motors is right, we could be witnessing a serious disruptive force - and one that might kick-start India on to a high growth path. Successful mass market mobility does that to a country.

1 Lakh Car

2008-01-12T21:36:00.000+05:30

Tata Motors Ltd., India's largest truckmaker, unveiled the country's cheapest car, pricing it at 100,000 rupees ($2,500) as it aims to convince the nation's 45 million motorcycle riders to trade up to four wheels.

Praise for Tata Motors' low-cost Nano car has been as much for its style and engineering as for its "world's cheapest" price tag, signalling India's intent to be more than just a cut-price manufacturer.

Analysts say India's reputation as a world-class information technology provider will help in that drive, but cost constraints and a growing shortage of skilled manpower may be roadblocks.

Tata unveiled the Nano on Thursday amid feverish media coverage, and said the curvy but compact car would carry a dealer's price of $2,500, affordable, it hopes, for millions of poorer customers in emerging markets.

"Tata reinvents the wheel," ran a banner headline on the front page of The Times of India daily on Friday.

India's engineering potential is "underestimated" by global auto firms, said consultancy KPMG, which says automotive services make up only a fifth of total engineering services revenue of $1.5 billion from global outsourcing.

"The auto industry competes for the same talent, but it is not as glamorous, and the pay is not as good," said Yezdi Nagporewalla, its national director for industrial markets.

Indian motorbike firms and components makers, whose exports are forecast to hit $20-$25 billion by 2015, have a longer history of developing innovative design and technology to be more competitive, said an analyst at consultancy Frost & Sullivan.

'Peoples car' to take over three years: Ratan Tata

2008-01-12T21:32:00.000+05:30

In the process of finalising the concept of its peoples' car, Tata group chairman Ratan Tata today said it would take more than three years for them to produce their much-talked about Rs one lakh car. While auto leader Maruti is sceptical about the feasibility of such a vehicle, Tata feels his company's new car, aimed at at-tracting a two-wheeler customer, would be slightly bigger than the Maruti 800 and would meet all the safety standards required here.

To a question about the deadline, Ratan Tata said that "once all these things (concept of structure, material and power train— the building blocks) are in place, it will take toolings and a manufacturing plant, and so on. Usually, it is a three-year period." On whether this schedule could be crunched, he said "yeah. But I would say it is a three-year period from that."

Suzuki Motor Corporation, the majority holder in Maruti, had earlier said it may not be possible to produce a car in this price range but would be ready with a matcher in case their monopoly at the entry level car was threatened. On whether India was becoming a small car hub. Tata felt Maruti and Hyundai were manufacturing proven products in the country from processed know-how that has come from elsewhere.

Stating that the foreign companies were not taking people from India to their design offices, he said "it leads me to believe 'they have no plans to move in this direction." Tata said India could become a major centre for manufacturing only if it has one of the major engines designed fully here, and then follow it up and manufacture it "Unless that were to happen, you would only be doing engineering for some other location," he said.

The Tata group chairman had a word of praise for the Indian two-wheeler industry which, he said had achieved almost global scales because the business was on a global basis.

World's Cheapest Car

2008-01-12T21:09:00.000+05:30