Saturday, May 10, 2008

Background Story of Tata Nano Car

Tata Nano many not need any introduction to you. Yes readers, I am talking about world’s cheapest car produced by Indian car manufacturer Tata Motors. Tata Nano will go on sale later this year for only Rs. 100,000 ($2,500). So, Tata Nano is reportedly going to be exported some other car markets in different parts of the world. Now, let us take a look at the background story of Tata Nano, dubbed as “people’s car.”

Ratan Tata, chairman of Tata Motors Limited (ADR) (NYSE:TTM), came up with the idea of making world’s cheapest car in 2003. Design engineers first came up with a car which had bars, in stead of doors, along with plastic flaps which would protect the passengers from rain. However, that design looked poor and the company turned it down.

In fact, Tata wanted to introduce a proper car with all the common features of a typical car. First Tata made the prototype of Tata Nano and called on its top suppliers to help to make this car possible. Tata received help from both local and foreign suppliers and engineers.

Businessweek reported:

GKN Driveline India, a subsidiary of global auto parts leader GKN, made the driveshaft—the component that transfers power from the engine to the wheel.

The team spent a year developing 32 experimental variants to create the perfect driveshaft for the Nano. It roped in designers from the company's French and Italian operations and changed the design to make it lighter and easier to manufacture. For the Nano's rear-wheel drive system, GKN designed a smaller diameter of shaft, which made it lighter and saved on material costs.

Fitting the parts of the car together required lots of little, head-breaking details, recalls Wagh. The engine, for instance, was designed three times. Initially, Wagh thought they'd buy an off-the-shelf engine and so studied all the small-capacity engines available. They were unsuitable, so in early 2005 he decided to build his own. The first was a 540 CC engine that, when fitted on the prototype, lacked the necessary power. So its capacity was increased by 9%, then by another 9%, before Wagh finally settled on a 623 CC engine. Then the foot pedal had to be realigned to create more legroom.

Tata Motors is now a bit worried about the future. As the prices of steel and other raw materials are increasing day by day, the company will have to face strong challenge to stick to this price tag.

Tata Nano has created a new segment in the car market. It is true that it is targeted at the segment A or entry level consumer. However, considering the price tag, you can not put it in this segment. Those who were earlier thinking of buying second hand car, will defiantly consider Tata Nano car. The markets of three wheelers and motor bikes will also be affected because of Tata Nano. The company is also planning to make an updated version of Tata Nano with a little bit higher price tag. So, it seems that Tata Nano is still without any strong competitor in this segment. However, much of its success will be proven, only if it runs well and satisfy the car users of India and abroad.


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