The Nano Saga

8/9/2019 The Nano Saga

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1

WELCOME

TO

THE WORLD OF

BUSINESS EXCELLENCE


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N A N OT H E

2


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CIRCA 2003 A.D.

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A D R E A M ISB O R NI observed families riding on

two- wheelers -- the fatherdriving the scooter, his youngkid standing in front of him, hiswife seated behind him holdinga little baby. Add to that theslippery roads & Night time too.It is downright dangerous.

It led me to wonderwhether one couldconceive of a safe,

affordable, all-weatherform of transport for 4


5/41

T H E R E S O L V E

Weshould

develo

patranspor

t

which

-Addresse

stheseprob

lemsan

d

-isaffo

rdabletom

asses.

5


6/41

T H E P R I C E O FB E IN G M I S Q U O T E D

The car was not initially scheduled to bepriced at Rs 1 lac.

In an interview, at Geneva motor show, acorrespondent from Financial Times ofLondon asked Mr. Tata about his

projected price of the peoples car andMr. Tata replied about Rs 1 Lac.

The next day the paper quoted that Mr.Tatas shall roll out a car for Rs 1 Lac.

The New

sof 1

lac c

ar

electr

ifiedthe

industry

and

thep

ricestuck

.

6


7/41

AND THUS BEGAN AJOURNEY

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8/41

A scooter with two extra wheels at theback for better stability?

WHAT SHOULD WE MAKE??

An Auto-rickshaw with four wheels?

A three wheeled car like a closed auto-rickshaw??

A four wheeled car made of EngineeringPlastics?

8


9/41

A Four wheeled rural car?

WHAT SHOULD WE MAKE ??Contd.

Rolled up Plastic curtains in place of

windows?

Openings like Auto rickshaws from theside instead of a door?

A four wheeled open car with safety side

bars?

EXECUTI

VEDECISION

Themark

etwantsacara

ndifweb

uild

a peoples

carit should be

a car an

d

notsomet

hingthat

peoplewouldsay,

Ah!

Thatsjust a

scooter w

ith four

wheels, o

r anauto-rick

shaw with

four

wheels&

notreally

aCar.

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10/41

HOW MUCH TO MAKE??

THE DEMANDPROJECTIONS

10


11/41

DEMA

ND

PRICE

PricePoint

at

which

demand

explod

es

THE DEMAND - PRICE RELATIONSHIP

The demand rises slowly till the threshold

price point beyond which it rises11


12/41

If only 10% customers of 9 Million two wheeler

market transit to 4-wheelers it shall amount to 50% of

the passenger car market share.

THE DEMAND PROJECTIONS

It was estimated that the demand for the peoples car

shall be at least twice the demand for Maruti 800, thelowest end car. Initial projections were at about 500 K

cars per year.

The basic reason was the conviction that the targetprice shall redefine the 4 - wheeler segment.

The price decision of Rs 1 lac is definitely going to

make a lot many people transit to 4-wheeler fold andthat shall explode the demand.

Itwas

decidedto

setu

pplan

tswith5

lacsc

arspe

r

annum

capac

ityandr

ampt

hesam

eupinsta

ges,in

line

within

crease

inmarket

dema

nd.

12


13/41

THE CUSTOMERSVOICE

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14/41

It may be an upgraded Auto-rickshaw with plasticbody. It shall be a very unsafe car as the very idea

of 1 Lac car is too far fetched to be true.

THE SCEPTICS

It is impossible to build a car at such a price. No

one has been able to do it so far. It is just notpossible.

It will be more like a scooter with a roof. I am sure

no one can make the car for the cost of two bikes.

It shall be a half car with no roof. I doubt if it will be

able to go up the flyovers.

It shall never meet the emission norms. We shall

choke on the poisonous emissions from this car.

Thed

isbelief

keptp

ilingu

pandu

pand

was

further

comp

ound

edbyt

heco

mpeti

torsadd

ingth

eirown

mite

tothe

speculati

ons.

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15/41

I hope I can take my family of 4 in this car. I wishTatas make this dream a reality.

THE FENCE SITTERS

IT HAS NOT BEEN DONE EVER. Even the nearest

car is double the cost. Let us see what Mr. Tata cando to maintain the price line.

I am not very convinced but would definitely go for

it if it is safe.

I know the talk is that it is a myth. However

miracles do happen. Let us wait and watch.The

reaction

wasa

mixed

one.Peo

plewi

shedit

tobe

trueb

utwereve

rycau

tiousa

boutexp

ressin

gthei

r

optimi

sm.

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16/41

CONVERTING THECUSTOMERS VOICE

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17/41

It should not emit poisonous fumes.

Must meet the mandatory Emission norms. I should be able to sit comfortably in it with my

family.

It should have adequate space to at least 4persons.

THE ORDER QUALIFIERS

It must be a safe car.

Must meet the mandatory Safety Standards.

It should look like a car and not a contraption.

To have a good ergonomic shape.

Theexpec

tations

were

veryclea

rlyspe

ltout

andhad

tobe

met.The

scept

icism

wasvery

evide

ntand

so

theca

rhad

toconform

toall

thereg

ulatoryno

rms.

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18/41

THE ORDER WINNER

PRICE TAG

OF

Rs 1 Lac

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19/41

STRATEGIC IMPERATIVES

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20/41

The car has to be designed so that it can be

exported to other countries as the domestic

demand may not materialise as per projections.

The car should be built on a different platform than

conventional ones.

It must be meeting all the safety and regulatoryrequirments.

THE STRATEGIC DECISIONS

The car to cost Rs 1 lac on road.

It has to be built on a scale which shall be more

than double the earlier launches of similarproducts and the ramp up must be smooth.Thecarm

ustbe

abea

conforth

eIndia

nAutomobi

le

indust

ryandp

rovet

othe

worldthat

wear

ecapa

ble

totake

anychall

engea

ndcom

eoutworth

ywinn

ers.

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21/41

The design has to question the need of each and

every component from the point of view of itsnecessity of existence and also the minimum

requirements of its functionality. Value

Engineering concepts have to be deployed to

finalise the minimum requirements.

Since the car had to be built within a cost of Rs 1

Lac, no conventional design would work as the costs

shall be higher and so the entire car has to beredesigned.

THE TECHNOLOGICAL IMPERATIVES

Rather than a Sustaining Technological Imperative

we have to go for lateral thinking and adoptDisruptive Technological imperatives.

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THE TECHNOLOGICAL IMPERATIVESContd.

Sustaining Technology:

Type of Technology that seeks to improvethe performance of Existing and newProducts thru' incremental improvements.

Includes Incremental and sometimesRadical Innovations thru' translatingCustomers' Voice into product attributesand incurring investments in R & D.

These Technologies foster improved product

performance along the dimensions o

performance that the Customers have

traditionally valued. 22


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THE TECHNOLOGICAL IMPERATIVESContd.

Disruptive Technology:

A Technology that is:

Significantly cheaper than existing Technology.

Is much higher performing.

Has greater functionality and

is more convenient to Use.

Is a Technology that brings radical changeby introducing new ways of doing thingsusually at a much lower before.

Brings to market a totally different Valueproposition than the one available and can

change the Paradigm about a product. 23


24/41

THE COST REDUCTION PARADIGM

Value Engineering Alternatives:

The Alternatives are:

The Guiding factor was that the cost has to beminimised for each component yetmaintaining its basic functionality.

Reduce Consumption of Material being used.

Alternate Suppliers to get same material atless prices.

Use alternate materials.

Eliminate use of Material.

Eliminate a process.

Or a Combination of the above.

Thetar

getwa

sverycle

arlyd

efined

that

withinth

egive

ncost

structur

eof1

Lacall

thecompo

nents

have

tobeallo

cated

a

maxim

umprice

andt

hesam

ehadto

be

achie

vedus

ingthea

vailab

lealt

ernatives.

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Locational Imperatives:

The Decisions were:

The Guiding factor was that the tax structure,on materials and manufacturing, mustsupport the final cost of Rs 1 Lac

Establish factory in a tax free zone.

Get the tax advantages on infrastructure

development. Get the suppliers to establish base near the factory.

Get special concessions from State Govt.

Inshortselec

tamanu

facturingloc

ationw

hereall

theadvan

tagesc

ouldbeac

hieved.

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26/41

Their willingness to work on tight cost and time

deadlines.


Supply Chain decisions:

The Decisions points were:

Guiding factor was that the suppliers to beselected on the basis of their acceptance towork on tight cost guidelines.

Suppliers Technical capability to tweak the design.

Their willingness to be a part of theprestigious project.

Their willingness to establish their facilities nearthe car manufacturing plant.

Inshor

tselect

suppliers

fromt

heperspect

iveof

deriv

ingma

ximumleve

rageou

tofpar

tnership

clearly

withthe

objectiveo

fswimt

ogethe

r,

creatin

gaWIN

WINsituation

.

THERE

HADTOBE

NOQU

ESTION

OFSINKIN

G

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27/41

A DREAM IS REALISED

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28/41

THE CAR PER SE

Engine Capacity Bosch 624 c.c. twin cylinder

Low capacity, Lighter ,sufficient with betterPower weight ratio

Rear Engine to reduce the transmissionlength using a balancer shaft.

4 Speed Manual Gear Box

All Aluminum Engine

Higher thermal conductivity than cast iron,Lighter and so better mileage

Engine Management System by Bosch

Superb control over emission and smoothacceleration.28


29/41

THE CAR PER SE

Dimensions L: 3.1m, W: 1.5m, H: 1.6m

Less length but more inner cabin space dueto height. Comfortable leg room.

Independent Front & Rear SuspensionMcpherson Strut in Front & Coil spring &trailing arm in rear.

Better ride than Maruti 800.

Single piece ribbed steel body with safetyfeatures such as crumple zones, intrusionresitant doors, seat belts, strong seats &anchorages.

Safety requirements are adequately met. 29

O O S G G


30/41

AN EPITOME OF SMART ENGINEERING

Single Wiper in place of two.

Cost effective yet functionality is met

Tube less Tyres

Weight reduced by 2 Kg. Cost reduction 200Rs. And in line with modern vehicles

Instrument console in the centre

Elegant to look at and can be used both inLeft Hand & Right hand version.

The list goes on and on.

TheFina

lverd

ict

THECA

RCOS

TSRs1lac

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31/41

CRY OF THE SCEPTICS

&

MYTHS DISPELLED

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32/41

MYTH No. 1

Nano is an Unsafe car

The car has a All steel body.

It meets the mandatory Frontal Impact

requirements.

It also meets the Side Impact requirements

although they are not mandatory in India.

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33/41

MYTH No. 2

Nano will greatly increase the Pollution Level

The car is Bharat IV and Euro IV compliant

although these norms , which are stricter than the

present Bharat III norms, are yet to be introduced.

It has lower carbon footprint, 20 mg / Km of

Carbon Dioxide emission as compared to 45mg /

Km, emitted by most of the two wheelers.

Its Multi Port Fuel Injection system is controlledby an intelligent Bosch Engine Management

system which controls the combustion cycle

precisely to ensure compliance to all emission

norms. 33


34/41

MYTH No. 3

Nano will struggle to perform

Although the car has 33 bhp as the maximum

horsepower it has a low kerb weight of 550 Kg and

so has a higher power-to weight ratio when

compared to many existing cars running on Indianroads.

The car has a matching acceleration to Maruti 800

and also a good top speed. Although themanufacturers have estimated 90 Kms as the

maximum speed the car can go upto 105 Kms per

hour top speed.

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35/41

MYTH No. 4

Nano has very Little leg room

Although the car is 8% smaller thanMaruti 800 it has lot of extra leg room atfront as there is no engine compartment.

This also leaves sufficient knee room atthe rear . The car has a tall boy type design so there is lot of

head space and also enough Shoulder room.

The mono volume design and the wheelshaving been put at the corners have freedup lot of in- cabin space and although thecar may be registered as a four-seater,

three slim adults can sit comfortably at35


36/41

MYTH No. 5

Cheap means Uncomfortable

More comfortable than some of the carsselling at even twice the price. leaves

sufficient knee room at the rear .

Easy to get in & out of the car because of perfect

seat height from the ground.

Suspension systems are good and thetrailing arms with coil springs are not

found in cheap cars. rear. 36


37/41

MYTH No. 6

Its very difficult for a rear - engined car to work.

Rear engines work in many cheap as wellas expensive cars.

Auto-rickshaws at one end and Formula One cars

on the other extreme all use rear engines.

Maruti Omni too has a rear engine, underthe seat and no one has been burnt due

to that. Cooling is easier in Nano as compared to

some vans and there are the air ducts oneither side behind the edge of the doors,

which allow air to seep in for both cooling37


38/41

MYTH No. 7

There is a shortage of storage space.

There is some storage space although notmuch.

The rear seat with parcel shelf folds to allow

accommodating a large suitcase.

Small articles can be placed under thebonnet also.

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39/41

MYTH No. 8

Cutting Corners is evident everywhere

Cost cutting is done by smart designingrather than taking out the essentials.

One wiper has been taken out but the functionalityis intact. Wind shield washer fluid jets are

mounted on the wiper itself rather than the body.

Wheels are held by three bolts instead offour.

On the contrary, MRF tubeless tyres andall Alumininium engine, have been used,

which are more expensive than39


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THE MARK OF A MAN

Since we started the

project more than four

years back, there has

been a steep increase inthe input costs

B U T A P R O M I S EIS

A P R O M I S E40


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EXCELLENCE IS AN ENDLESS JOURNEYLIKE WALKING TOWARDS THE HORIZON

NO MATTER HOW FAR YOU WALK

IT DOES NOT CHANGE

E E E

The Nano Saga

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