When the Chief Tata Group of Companies of India Ratan Tata drove the car to the podium at the Ninth Auto Expo in New Delhi recently, the world gaped in surprise as to how the small car was put together in collaborative engineering and the veil of secrecy was lifted by many component manufacturers with whose help Ratan Tata was able to keep his promise and deliver a car for one lakh rupees (approximately $2500). Some of these manufacturers, most of them homespun Indian outfits, had worked with the core Tata Motors team in total secrecy for more than three years.
In fact, the price target was achieved by only improvisation in design and not by cutting down the essentials. The message given to them was to make things smaller and lighter and avoid the superficial parts and to change the material wherever possible which was carried out with precision. Some of the manufacturers did their own research; some developed products with Tata Motors and quite a few of them were offered designs by Tata Motors. Some vendors were offered assistance by the Tata Motors themselves in finding international partners for making products that met the company's requirements.
It all began by primarily changing the material of the engine. Conventional engines are made of cast iron which adds weight as well as the cost to the car, but in a Tata Nano it was decided to make the 623 cc two cylinder petrol engine from aluminum which being smaller and lighter, lowered the cost too. Since the engine was placed at the rear of the car, it exercised less pressure on the steering systems and therefore there was no need to have to link between the engine and the rear wheels. This feature also saved the cost.
Instead of the conventional "rod" design, the tubular design of the car reduced the process thereby reducing the cost. In the place of long life bulbs, regular bulbs meeting the regulations were used using some competitive buying of materials from China and Thailand, which also aided in reducing the cost. Nothing was spared in trying to reduce the costs, including old-fashioned bargaining of fifty percent of the component supplier's offer.
Even though the design of the car was outsourced to Italy's Institute of Development Initiative Engineering, Tata himself ordered changes like the design of single wind shield wipers in place of two wipers that gave a cleaner look to the car which also cut the cost to half.
Tata Nano has a ceiling high enough to handle a tall person and also has an air intake scoop in front of the rear tires and the vertical taillights. Similar to an overhead bin on an aeroplane, the front hood would also have a small storage space.
But, Nano is expected to sell in large number, which would certainly make up for the crunch in margins. Even country's top automotive glassmakers could not meet the Tata's reduced price demands.
