Introduction Of NANO In Auto Sector “Great things come in small packages” and so is NANO, peoples car. Mr. Ratan Tata envisioned that every Indian must own a four wheeler, most affordable car with all basic facilities in any other expensive car. And today the most awaited car is a part of the ever growing automobile sector. Ratan Tata, the Chairman of Tata Motors, began development of the world’s cheapest production car in 2003, inspired by the number of Indian families with two-wheeled rather than four-wheeled vehicles.
It was however not a easy start for the Tata family. After much speculation, Tata Motors announced on May 19,2006 that it will be manufacturing Tata Nano from Singur, West Bengal. The introduction of the Nano received media attention due to its targeted low price. TheFinancial Times reported: “If ever there were a symbol of India’s ambitions to become a modern nation, it would surely be the Nano, the tiny car with the even tinier price-tag.
Rival car makers including Bajaj Auto, Fiat, General Motors, Ford Motor, Hyundai and Toyota Motor have all expressed interest in building a small car that is affordable to more middle-class consumers in emerging markets. The bulk of demand there is for small cars because people are much more sensitive to fuel prices. The Nano is alleged to have severely affected the used car market in India, as many Indians opt to wait for the Nano’s release rather than buying used cars, such as the Maruti 800 (Suzuki Alto), which is considered as the Nano’s nearest competitor.
Sales of new Maruti 800s have dropped by 20%, and used ones by 30% following the unveiling of the Nano. As one automotive journalist summarises; “People are asking themselves—and us—why they should pay, say, 250,000 Rupees for a Maruti Alto, when they can wait and get a brand new Nano for less in a few months’ time, a car that is actually bigger” OVERVIEW: Never before has a single project in India generated so much of interest at the global level. Keeping the promise, made four years ago, the launch of the Rs. lakh car in 2008 from the house of Tatas has indeed received rave reviews both in India and around the world. As stated by Mr. Ratan Tata, Chairman of the Tata Group that “The vision was to give the people of India a car which is not produced anywhere else in the world. Through Nano, which denotes high technology and small size, I have tried to provide a reliable mode of transport to every Indian family”. Auto sector basically consist of various segments of cars like the ‘A segment’ which consist of hatch back or small cars, the ‘B segment’ of midsize cars, the ‘luxury car segment’, etc.
But Nano revolutionized the auto sector by introducing all together a new segment of cars, famously known as “The Nano Segment” or “Lakhtakia car”. The world’s cheapest car which is 3. 1 metre long from the Tata Motors stable has three variants – standard and two luxury models. Though it is eight per cent smaller than Maruti 800 [bumper-to-bumper], it is twenty one per cent more spacious from inside. As stated by a Delhi-based senior auto journalist of a U. S. wire agency that “It is a milestone for not just Indian automobile industry but for the entire global auto sector.
It will give some jitters to all global car-makers who are now focusing on small cars too”. If we see the global auto sector, Tata Motors ‘Lakhtakia car’ poses a challenge for almost all the automobile companies of the world. Especially after winning ‘Jaguar and Land Rover’ deal which is contributing as icing in the cake for the company. For example in the U. S. , the cheapest car comes in a price range of $10,000-$15,000. But now if Tata Motors decides to launch their Nano in U. S. market, it could be priced at $2500, which will be serious competition for U.
S. auto makers. Even the European markets are not spared of the Nano wave . Tata motors Nano has come out with a great design which even matches the European standards of safety and has passed a full frontal crash test. And not only that, Nano comes in an all sheet-metal body, with safety features such as crumple zones, intrusion-resistant doors, seat-belts, strong seats, anchorages and rear tailgate glass bonded to the body. Tata Motors confirmed that Nano met all current legislative emission norms and could be upgraded to meet Euro IV norms.
Ratan Tata has challenged conventional wisdom with the launch of the world’s cheapest car, Nano. This would induce a fresh dose of entrepreneurship while making a big social impact When Tata Group Chairman Ratan Tata fulfilled his “promise” in January this year with the launch of Nano, the world’s cheapest car, it enthralled not only the common man but big and small businesses alike. The world greeted the Rs 1-lakh car with accolades unmatched in recent history as the media from every nook and corner of the globe descended in New Delhi to take a first-hand look of the most anticipated automotive model ever.
The compact hatchback has set off a revolution not only in the automobile industry but the entire manufacturing ecosystem, dismantling the belief that ‘low-cost is always cheap’. The four-wheeler is not only a marvelous piece of inspiration and innovation but also a dream come true for the burgeoning middle class and the ambitious blue-collar community in the whole of Asia. How well has the Nano made a place for itself in the minds of the common people of this country is reflected in the statement made by an auto driver I spoke to on a recent winter morning. I will replace my auto with the Nano. It would save me from Delhi’s unbearable summers, chilly winters, and inundating monsoon,” he said. “But when will it be launched? ” was his question. These words reflect the hope that drove Tata to meet the promise of making the Rs 1-lakh car four years ago despite the disbelief expressed by experts across the globe. Tata visualized a family of four on a scooter while offering the Nano, which would provide comfort and safety to the common man. “The Nano is just not about the small car segment—that would be taking a myopic view.
It is a question of social growth and well-being,” says Dilip Chenoy, Director General, Society of Indian Automobile Manufacturers (SIAM). Indeed Nano is not just a machine; it is the locomotive for social change, and meets the aspirations of the masses. But as we talk of the Nano, we cannot help but think of Maruti 800, the original people’s car launched back in the 1980s. It too created a buzz with its price tag of Rs 50,000 at a time when there were no Internet and cable television.
Even though history has repeated itself, this time around there are blogs and Websites splashed with the finer details about the making and the launch of the ‘small wonder’. As rightly said by MURAD BAIG( AUTOMOBILE ANALYST)“About 70% of all cars are made by their component makers so the Nano is the product of huge joint innovations by them all” Innovation: Low-cost is no more cheap was the tool used by MR RATAN TATA. No business can survive today without innovation. Nano has set a new benchmark for innovation. Products, services, processes, supply chain—each segment of business calls for fresh thinking in tune with the fast changing world. About 70% of all cars are made by their component makers so the Nano is the product of huge joint innovations by them all. Bosch, for example, has created a totally new fuel injection system with one injector feeding the two cylinders turn by turn with precise electronic controls,” After low-cost airline and low-cost mobile telephony, here is the low-cost car. The Nano effect has made companies the world over ponder over how they can do a Nano with their products and services. The Nano has established India’s prowess as a low-cost manufacturing hub with supreme engineering skill on offer.
It is time for entrepreneurs to stop and think of how to leverage this advantage and weigh a number of opportunities across sectors—housing, healthcare, public transport, and education, to name a few. Impact on the auto sector Auto Components Ever since the work on Tata’s small-car plant began in Singur in West Bengal, more than 50 auto components manufacturers have either set up shop there or are in the process of doing so. These include Tata Toyo, Amtek Auto, Kinetic Engineers, Bosch Chassis Systems, Caparo Engineering, Rucha Engineers, Sona Koyo Steering and Sharda Motors.
To facilitate space to parts suppliers, a vendor park is coming up right next to the Nano plant. Caparo will provide the inner structural panels to Nano while Tata Ryerson, a 50:50 joint venture between Tata Steel and Ryerson, will supply the chassis for the car and 16 non-load bearing components. Similarly, Amtek Auto will provide engine and suspension components. But Singur is not the only shining spot. Adityapur, near Jamshedpur in Jharkhand, is also seeing a lot of activity in the auto space.
The state’s first automobile and auto components special economic zone (SEZ) is being set up in Adityapur. Tata Motors is planning to develop an auto park in the city. In 2006-07, the auto components sector garnered sales worth $15 billion. This included exports worth $2. 9 billion. There are several factors driving the growth momentum. These include flourishing domestic auto industry, sharply rising number of after-sales and service centers, and contract manufacturing. The Auto Show held in January saw participation of over 1,900 auto components and ancillary companies.
PROBLEMS NANO FACED IN WEST-BENGAL Tata planned to build its Nano car in West Bengal state but moved production to Gujarat last year after protests over land earmarked for the plant. Tata chief Ratan Tata told journalists in Calcutta he did not want to stand in the way of development in West Bengal. He added: “We will obviously seek to be compensated for what we developed. ” He did not say how much compensation he was seeking. Mr Tata said his group had no projects lined up for Singur at the moment, but made it clear Tata was willing to give up the 998 acres of land it has there. We don’t want to stand in the way of the industrial development of West Bengal,” he said. “We are hit by the economic downturn. If the state government has lined up something, we will hand over the land. ” When asked whether he was aware that Indian railway minister Mamata Banerjee wanted a locomotive plant to be built at Singur, Mr Tata refused to comment. The situation escalated with Tatas threatening to pull out,and disruption of compensation for farmers who had volunteered to sell their land by anti-acquisition activists.
Violence continued throughout 2008 and on September 2, 2008, Tata Motors announced that they have suspended work at Singur. On October 2 ,2008 Tata Motors announced that they are pulling out of Singur. On October 7, 2008, it was announced that the Chief Minister of Gujarat, Narendra Modi had signed an MoU with Tata Motors for allocating land for Nano factory in Sanand Ms Banerjee – whose Trinamul Congress party fiercely opposed the Nano project – says the proposed locomotive plant would need 600 acres.
The remaining 400 acres would be handed back to peasants who are unwilling to part with their land. GAIN FOR GUJRAT West Bengal’s loss is Gujarat’s gain. It was announced that the Tata Nano project for the Nano ultra-cheap car would move to Sanand, Gujarat. Gujarat chief minister Narendra Modi has rolled out the red carpet for the people’s car. Ratan Tata chose Sanand, 30 kms away from Ahmedabad, for the Tata Nano project after examining possible locations in Maharashtra, Uttarakhand, Karnataka and Andhra Pradesh. The overall clicmate in Gujarat has been extremely favorable to industry.
That, and the fact that the general populace of the state is in favor of industrialisation were important factors in enabling Narendra Modi to allocate 1100 kilometers for the Nano project. The Tata Nano project location in Sanand boasts of close connectivity to National Highway-8 connecting Rajkot and Ahmedabad. The Nano site is also close to the proposed Dholera port, which is being set up as an industrial development project as part of the implementation of Delhi-Mumbai freight corridor. This could mean that if the Tatas need to export the Nano, they wouldn’t have to go far.
Equally exciting for the Tatas is the reception the company has got from farmers who said they were ready to give their land for construction of approach roads to the site. The land made available to Tata Motors is from the Anand Agricultural University. The Sanand plant will also have the convenience of being close to Rajkot where a slew of Nano components would be made at different ancillary units. Unlike the situation in Singur, local people and the political leadership expects all that is good to come to their doorstep as the chance of a boom in economy is more that they ever thought as the Nano gets ready for the roll out.
The Nano project in Sanand will have the manufacturing capability of 250,000 cars in a year initially. Ratan Tata expressed his happiness at things moving so quickly after the disappointment of Singur, West Bengal where the protesting farmers affiliated to the opposition Trinamool Congress party successfully froze the project. The benefits offered by the Gujarat government to Tata Motors are slightly better that what the West Bengal government offered to Tata Motors, he added. It may take Tata Motors a bit of time to set up the plant in Sanand, and commence actual manufacturing.
Meanwhile, Ratan Tata said the company would try to meet the production deadline for the Nano small car – it is believed that the intiial Nanos would be produced at the Pantnagar plant of Tata Motors, and production would shift to the Sannd plant only after the plant is set up and the ancillaries manufacturers have succesfully moved in and started operations too. Initially, Sanand would see production of the petrol Tata Nano cars, and later more variants, such as diesel, electric and CNG versions of the Nano would be produced here. Thanks to Mr RATAN TATA for giving us nano.