1. Ratan Tata’s dream that Cyrus Mistry could not implement: A Nano that runs on air

Ratan Tata’s dream that Cyrus Mistry could not implement: A Nano that runs on air

Ratan Tata had grand plans for the Nano - ones that included getting the car to run on compressed air and batteries!

By: | Published: October 28, 2016 11:01 AM
Ratan Tata, Cyrus Mistry, ratan tata Cyrus Mistry controversy, Cyrus Mistry ratan tata issue Ratan Tata had a big turnaround plan for Nano, which did not materialise because he (Tata) handed over the reins to Cyrus Mistry back in 2012.

Ratan Tata had grand plans for the Nano – ones that included getting the car to run on compressed air and batteries! According to a report in HT, Ratan Tata had a big turnaround plan for Nano, which did not materialise because he (Tata) handed over the reins to Cyrus Mistry back in 2012. Nano, touted as the cheapest car in the world, is Ratan Tata’s dream project. However, the car’s sales had dropped by as much as 70% over the past six years.

Sources in Tata Motors told the paper that a lot of research had been done on the development of a new Nano platform that would enable the car to run on compressed air, and electric and hybrid varieties. According to the report, Tata Motors had been working with Motor Development International from France, for a 7-year project. This collaboration was mean for the ‘air car’. Ratan Tata also wanted to make a feature-rich Nano, especially for the Latin America and Europe.

Also read: Cyrus Mistry says he was reduced to a “lame-duck” chairman: Full text of his letter to the Tata Sons Board

But, Cyrus Mistry saw only losses in the overall Nano project, as is evident from the letter that he wrote to the Tata Sons Board, soon after his sacking. Blaming Ratan Tata of keeping the Nano project alive, only for emotional reasons, Cyrus Mistry said that there was no sight of profitability when it came to that car. “…the Nano product development concept called for a car below Rs. 1 lakh, but the costs were always above this. This product has consistently lost money, peaking at Rs. 1,000 crores. As there is no line of sight to profitability for the Nano, any turnaround strategy for the company requires to shut it down,” Mistry wrote. ” Emotional reasons alone have kept us away from this crucial decision. Another challenge in shutting down Nano is that it would stop the supply of the Nano gliders to an entity that makes electric cars and in which Mr. Tata has a stake,” he alleged.

Mistry has said that as the group chairman, he tried to turn things around – be it from a Nano to an ultra-mega-power plant. Mistry has hit out at Ratan Tata, his predecessor, for interference. Mistry has lamented that Ratan Tata’s interference had increased to the extent that he (Mistry) was reduced to being a ‘lame-duck’ chairman. In one of the biggest upheavals in the corporate sector, the Tata Sons Board on Monday appointed Ratan Tata as the interim chairman of the group, replacing Cyrus Mistry. The Board has constituted a Selection Committee to choose a new Chairman.

  1. B
    Bani
    Oct 28, 2016 at 7:41 am
    Ratan tata erred with the strategy of giving the fellow Indians a cheap car.... he should have known that India is a value market, not for cheap products....
    Reply
    1. I
      ITProfessional
      Oct 28, 2016 at 10:33 am
      Entire Cyrus Mistry episode could have been avoided if he was well hired, boarded, transitioned and mentored wellpany like Tata Group for a position like Group Chairman needs to be well managed as it is a very important position. To begin with, Tata Group could have hired someone who is the lead CEO of its various divisions and put into the interim role first, made him understand the roles, responsibilities, made him understand the vision of previous chairman and then transitioned. If the transition did not happen well, exit could have been well managed avoiding all the PR hiccups as it happened
      Reply
      1. I
        ITProfessional
        Oct 28, 2016 at 7:35 am
        Nano was a difficult project to begin with both by design or the cost. May be it had to be revamped and redesigned to make it a better or increase the price to make it profitable etc
        Reply
        1. Mallikarjun Iyyer
          Oct 28, 2016 at 7:10 am
          profits do not make enterprises! risk taking capabilities do! if you r making losses it is better to sell your house and ask family starve and walk rather than be secure and befriend the powerful.
          Reply
          1. Rajendra Rajendra
            Oct 28, 2016 at 6:31 am
            Ratan Tata had a hallow around him till this issue broke out- removal of Cyrus Mistry and his own coming back. It has hit indelible blow to Ratan Tata image and legacy, that too, in twilight of his career. Its clear Ratan Tata was judging and policing since 2012 and wanted the job himself though he himself picked up Cyrus Mistry, inducted him and handed over the charge. Ratan never told anyone that he made a mistake in picking up Cyrus- 4 years is a big period to do a confession. Tatas were better off letting Ratan Tata continue as Chairman with Cyrus Mistry or anyone as Vice Chairman so that after he pes away or in times of any eventuality the Vice Chairman could take over without any new search for successor. Change of rule regarding age was more important than all these missteps of last one decade. Ratan Tata should have continued as Chairman till his death, even now this arrangement could be finalised because in 4 months they wont be able to select any Chairman ( will anyone join easily?) and then the Board wont be happy with anyone else as Chairman but Ratan Tata.
            Reply
            1. S
              Subrat
              Oct 28, 2016 at 7:38 am
              Cyrus is right, this air/battery operated nano is a gimmick to divert the issues that Mr. Mistry has brought about.
              Reply
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