TATA Motors? Rs 1-lakh car is here. And the Tata Nano, as it?s called, looks every bit the gamechanger it had promised to be. The price has long been talked about, and is no longer what is making people rub their eyes. That price begins to assume new meaning once placed in the context of three basic aspects of the car that could make it a runaway success that challenges the existing dynamics of the market for personal vehicles. First of all, it can actually seat four people in comfort. Second, it resets notions of four-wheeler fuel efficiency. And third, it is low on maintenance costs. The Nano, named to suggest hi-tech miniaturisation, is a design breakthrough. Its physical dimensions make it smaller than the Maruti 800, but it has 21% more interior space, thanks to the ?egg? shape last seen in the Maruti Estilo. With a four-shift manual gear that operates an all-aluminum, two-cylinder engine that displaces 624 cc and delivers 33 brake horsepower, it is claimed to offer 23 km to the litre. No major compromise has been made on the product.
How, then, do the cost economics work out so low? Economies of scale based on expected production runs of a million units a year would be much too pat an answer. Motor market speculation points to a series of assembly line ?nano-innovations? of the kind the Japanese are famous for, with invisible inventories and input costs kept superlow by large-scale outsourcing to a vendor network with wafer margins, negligible waste and ?new age? raw materials. Naturally, the Nano has significant implications for the customer, the company, and the competition. For the household consumer, an upgrade from a two-wheeler has never been such a breeze. For the company, it is mostly a management challenge of ensuring that the clockwork doesn?t let anything slip?not a nanosecond, nor a nanometre, so to speak. Launching a product on such a vast scale demands logistical planning of an unprecedented order. Just cranking out enough cars quickly enough in the first few months to prevent any ?black marketeering? might be quite a task. For the competition, the Nano is a product that will necessarily reshape their strategies, be they two-wheeler or car marketers. Or even mass transit system operators. This is a mass market that is functionality-oriented and budget-bound as much as it is status conscious.
