Tata: We may allow other firms to make Nano to meet demand

Ratan Tata, chairman, Tata Motors, today said he would consider the option of giving out the Nano design to other carmakers for licensed manufacturing, though there are no such plans as of now.
If his company couldn’t meet the demand on its own, he was willing to consider allowing others for a licence fee, Tata said during an interaction with the Indian media in Geneva at the 78th annual international motor show. Nano, along with other new products from Tata Motors, including the new Indica, is on display at the motor show.

Tata’s comment on the subject of licensed manufacturing comes at a time when other global manufacturers such as Renault are keen to make low-priced cars to address markets like India.
India’s largest automobile company, Tata Motors, had unveiled the world’s cheapest car, Nano, in January at the Auto Expo in New Delhi.

Managing Director Ravi Kant added that consumers could expect innovations in the area of financing for Nano buyers, given the shortage of funds for the two-wheeler finance market in India.
He, however, refused to divulge the details. Due to rising defaults in the two-wheeler finance market, large retail bankers such as ICICI Bank and HDFC Bank have in recent months shrunk their exposure by as much as 20 per cent. Rising interest cost has also been a cause of concern for buyers.

Tata further said Nano would be made available in developed markets like Europe later. The positioning in Europe would be that of a totally compliant vehicle (emission and safety) at a price that had not been arrived at, he said.

Without fixing any deadline, Tata said his company would play a very significant role for vehicles run on alternative fuels such as electric and hybrid versions. This, he said, could be done by buying technology and systems, suggesting that there would not be any attempt at reinventing existing technologies.

He also added that the company was pursuing the idea of distributed manufacturing for Nano, where kits could be sold to entrepreneurs for assembling and sale. This, he said, would not be in lieu of existing distribution system, but over and above that.

Nano gets Geneva buzzing

The Tata Nano received a very positive response from the international automotive community at Geneva Motor Show, which ran from March 6 to 16. Unveiled by chairman Ratan Tata in front of a huge gathering of international media, the Nano received the same adulation, albeit on a smaller scale, that it got at the recent New Delhi Auto Expo.
At Geneva, Tata showedcased the top-end version of the Nano to show that this little car can be upgraded to meet European market needs. It featured leather seats, brushed aluminium trim and airbags, while the interior trim was a smart combination of red and black. The price of this version however is unlikely to be close to the Rs 1 lakh cost of the base model. Even if it is around 4,000 Euros (Rs 2.4 lakh), that would still make the Nano the cheapest car in Europe. Almost every global CEO from GM’s Rick Wagoner to Renault-Nissan’s Carlos Ghosn came by the Tata stand to see the Nano for themselves and try to figure out how Tata had managed to price the Nano so competitively. It is not clear when Tata will begin selling the Nano in Europe since it will be busy meeting demand from Indian buyers over the next few years. It is likely that exports to Europe won’t begin for the next three to four years, by which time, the face-lifted or upgraded Nano will be launched. According to company sources, Tata has already begun work on a more advanced version of the Nano, specifically for international markets. Tata also showed its New Indica at Geneva, a debut that almost went unnoticed thanks to the Nano. However, it’s the new Indica powered by Fiat engines that will be Tata Motors’ main model driving its thrust into the European market. The new Indica is a huge improvement over the previous model and this will make it more competitive in Europe. The Tata Group itself has gained a reputation as a formidable business house after the takeover of steelmaker Corus and the imminent acquisition of Jaguar and Land Rover and now the debut of the Nano. The company will be eager to cash in on this wave of goodwill.

Nano indeed will meet a genuine need of thousands of our families

Excerpts from an interview with Mr. Ravi Kant – MD, Tata Motors.

The rolling out of “Nano’ has been a long-cherished dream of Mr. Ratan tata. How do you feel now that the car is on the road?
We have unveiled the Nano at the Delhi Auto Expo in January this year. As our Chairman, Mr. Ratan N. Tata has recollected that he had observed families riding on two-wheelers – the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby. It let him to wonder whether the company could conceive of a safe, affordable, all-weather form of transport for such a family. The response from lakhs of visitors at the Auto Expo, indicates that the Nano indeed will meet a genuine need of thousands of our families.

What are the innovations that have made the Tata Nano possible from product design to product development?
The development of the Nano is the result of series of path-breaking innovations, harnessing latest technological advances. These innovations have enabled the company to make it affordable and yet delight the customer with desired attributes.
It has been designed to meet consumer requirements of personal mobility, comfort, all weather protection and at the same time being safe, stylish, environment-friendly and above all affordable.
It is powered by all 2 cylinder rear wheel drive engine with capacity of 623 cc and is proposed to be available with a 33 PS Gasoline powertrain. The lean design strategy has helped minimize weight, which helps maximize performance per unit of energy consumed and delivers high fuel efficiency. The higher fuel efficiency also ensures that the car will have low carbon dioxide emission, thereby providing the twin benefits of an affordable transportation solution that also addresses the imperative to contain climate change.
Its contemporary monovolume design which maximizes interior space by pushing the wheels to the corners and placing the powertrain under the rear seat, making maximum utilization within the smallest foot print which helps in maneuverability, and also reducing parking space.
Made of all sheet-metal body, it has a strong passenger compartment, with safety features such as crumple zones, intrusion resistant doors, seat belts, strong seats and anchorages and the rear tailgate glass bonded to the body. Tubeless tyres further enhance safety.

Designing and developing the small-car has been a challenging task. What were the major challenges you faced while designing the ‘small-car’ like emission norms, safety standards, etc.?
Our biggest challenge was to maintain balance between cost and performance. The car had to be attractive to consumers without any compromise on quality, performance and regulatory requirements.

How has the Indica experience helped in the creation of the ‘Nano’?
The Indica experience has been of immense value in developing the Nano. The learnings from Indica on in-house design, multiple stages of innovation, production preparation processes in planning stage, design and process validation plans, etc. have all helped in the development of the Nano.

Do you have plans to bring out future versions of this car?
The Nano will be launched with a gasoline engine and in two versions – Standard and Deluxe. Over the years, Tata Motors has plans of several other versions.

What next from the Tatas on the automotive front?
Tata Motors has been consistently offering innovative products. In the coming years, the company will completely change its entire portfolio, with new generation vehicles coming out. We have already shown the new Indica, the new Grande Sumo, the Magic, the Winger, not to speak of the Ace. There will be several other similar products.

Why did you choose Singur in Bengal over other states for this ‘ambitious’ project? Did you face any problem from any quarters in setting up the industry at Singur?
Tata Motors indeed has the option of establishing the plant in some states, where the Union Government is offering major incentives, and some others where the state governments among them West Bengal, were willing to match those incentives. The government in West Bengal is keen for rapid re-industrialization. The state government showed keenness to host the plant, rightly concluding that it will have a ripple effect of attracting greater investment for rapid industrialization. We as a company too want to take part in the growth of industry in the state. That is why we chose West Bengal. The Government showed us several plots. Out expert team, considering the unique requirements of the plant site, including physical characteristics, logistics, cost, etc. selected the plot on Singur, as other plots did not meet one or many of our requirements.

How has the Group helped in the upliftment of socio-economic conditions of the local people of the region by providing employment opportunities and training facilities to the educated unemployed?
Even before the plant’s construction started in January 2007, we had chalked out and begun to implement a plan to integrate the community with the project, as we do in our other locations at Pune, Jamshedpur, and Lucknow. The plan, being, implemented in association with the state government, is designed to a) enhance employability of men in the community b) create employability for women and c) improve health and education facilities. The first batch of employees, from among trained local individuals, has been selected: several hundred more are under training. The first self-help group of women has started functioning, supplying food to employees engaged in plant construction: others will be trained in producing personal gear for workmen and components for the car. A health programme has been started, and education facilities are being improved.

So far, what have been your experiences in Bengal?
We are receiving fullest co-operation and support from the West Bengal Government. We have also seen enthusiastic response to the initiative in enhancing employability of people in Singur and other community development initiatives. There are always some challenges in operationalising large scale projects and we are making best endeavours to work towards their satisfactory resolution.

How pro-active and supportive is the state government and agencies like WBIDC?
We have found the state government and agencies concerned to be proactive, supportive and investment-friendly. In fact, the state administration’s speed, transparency and assistance have been key factors in establishing the plant in the state.

The State Chief Minister has a vision to put Bengal on the global industrial map and has been working hard to make this a reality. What are your views on this?
Today, every state in India is competing with each other to attract investment to spark comprehensive economic growth. The Chief Minister’s vision needs to be realized if West Bengal has to complement its past achievements, in sectors like agriculture, with future imperatives of employment generation. West Bengal has the talent to make this happen.

How attractive is the State’s Industrial Policy and Incentive Scheme? What are your suggestions to the state government?
The central incentives for under-developed states do not apply to West Bengal. We believe the state is pursuing the right path to incentivise industry and be competitive with others. While doing so, the government should also channelise investment in the technical education sector so that the talent in the state is appropriately endowed with desired skill sets.

Sir, if you could please share with us some of your future plans?
Besides the Singur plant for the Nano, Tata Motors has established a plant at Pant Nagar in Uttarakhand, which already produces commercial vehicles, and a joint venture facility with Fiat at Ranjangaon in Maharashtra for passenger cars. Simultaneously, capacities are being expanded at Pune, Jamshedpur and Luknow. It is setting up yet another plant at Dharwad in Karnataka for Buses, Light Commercial Vehicles and Panel Vans. All these plants will help us meet the demand that we expect in commercial and passenger vehicles. Over the coming years, the entire portfolio of our products will change with new generation vehicles. The company is also considering manufacturing facilities abroad – South Africa and Thailand.

How do you foresee the future of the automotive sector in West Bengal?
Adjacent to the plant for the Nano, will be a vendor park. The vendor park will host about 56 different companies supplying parts for the Nano. These companies are free to supply to others as well. We believe that this development should make West Bengal once again a cluster for auto and auto components related manufacturing. The Automotive Mission Plan 2006-16, a joint initiative of the Government of India and the Automotive Industry including the auto component industry, which was released at the hands of the Prime Minister in January 2007, envisages a growth from 34 billion US dollars (i.e. Rs. 1,65,000 crores) now to 145 billion US dollars (i.e. 6,67,000 crores) generating employment of an additional 25 million jobs. West Bengal has the potential to garner a fair share of this growth.