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Tata Nano running out of gas as numbers plummet

Murali Gopalan | Updated on: Jul 05, 2018
A file photo of the Nano’s assembly line in Sanand, Gujarat

A file photo of the Nano’s assembly line in Sanand, Gujarat

NEW DELHI, 10/01/2008: Tata Group Chairman, Ratan Tata launching the Rs. 1-lakh 'Tata Nano' car at the 9th Auto Expo in New Delhi.
Photo: S. Subramanium

NEW DELHI, 10/01/2008: Tata Group Chairman, Ratan Tata launching the Rs. 1-lakh 'Tata Nano' car at the 9th Auto Expo in New Delhi. Photo: S. Subramanium

With just one car produced in June, the story is virtually over

It is no secret that the Tata Nano has been in free-fall mode for a while now. Yet, the fact that just a solitary car was produced in June is a sad reflection of a dream that went sour.

After all, this was a project that was very dear to Ratan Tata and truly caught the imagination of the world. The ₹1-lakh price tag was enough for some top guns like Carlos Ghosn, CEO of Renault-Nissan, to sit up and take notice even while there were naysayers who sneered at the effort.

There is no question that the Nano was a huge global advertisement on frugal engineering, which also showcased the prowess of India. No wonder that Ghosn also decided to throw his hat into the ring with the ultra low cost (ULC) car in a partnership with Bajaj Auto.

From Tata Motors’ point of view, the Nano was the perfect plank for the two-wheeler rider keen on graduating to the next level. Its biggest draw was its price, which ironically ended up being the millstone around its neck. Nobody wanted to be associated with a cheap car but all that came much later.

Audacious costing

The significant part of the Nano was that it was for the first time that anyone had attempted such an audacious project in terms of costing. It also seemed pragmatic given that India was the largest producer of two-wheelers in the world, which also reflected the levels of affluence.

There was no question that many of these customers would have been delighted to own a car so long as they could afford it. Hence, Ratan Tata was absolutely right in spotting an opportunity and deciding to work on it with a passion.

It was a throwback to the Indica days when the same man had thrown down the gauntlet in daring to produce a car when his company was better known for trucks. Even while the Indica could not quite build upon its initial momentum and kind of lost its way in later years, it was still a strong statement.

The Nano had taken the challenge to an altogether different level thanks largely to its pricing. The world wondered how such a product could actually be conceived at ₹1 lakh. Till then, it was the Maruti 800, which was deemed the most affordable car for years and here was a rival model threatening to rewrite the rules of manufacturing.

Beyond this, it was going to be produced in West Bengal, a state that had little going in terms of industrialisation even while it had been home to Hindustan Motors’ Ambassador for decades. Having the Nano as the new resident was perceived as being prestigious since it had already got the attention of the world.

During an interview with this writer, Ratan Tata had spoken of the ₹1-lakh car. Its launch was still over a couple of years away even while it continued to make headlines.

Tata’s dream

Tata spoke of the rationale behind the project and why positioning was important.

“If we are looking at a small car, we should not do this at the same proportion as cars of today are being looked at. We should be bold and take some risks so that we can have a much larger scale of consumption of that product in India or elsewhere,” he explained.

It was during the course of this interview that Tata articulated his aspiration for those masses of people in India who would benefit from this offering. He reiterated that it was important to set goals high.

“So you have to be very bold and say that I am going to really change the paradigm of how people are going to travel, how families are going to have transport. I am going to try to get families to stop using tractors to go into town or to sit on a motoscooter in a dangerous manner,” elaborated Tata.

He was candid enough to acknowledge that it was not going to be the easiest of tasks to meet the ₹1-lakh price tag. It was perfectly natural for people to scoff at this unrealistic target but then, as he pointed out, the Indica had also experienced similar feedback from sceptics.

“It can be done but need not be done in the conventional manner of how the West looks at such products. All I am trying to say is that the way the West perceives something and the way we must look at something is different. The West is not trying to address the low end of the pyramid,” said Tata.

It was during the 2008 Auto Expo in Delhi that the Nano was finally unveiled and the huge crowds gathered there broke into spontaneous applause. There were journalists from other countries too and it looked as if everyone wanted this little wonder on wheels to succeed.

The plant that didn’t grow

Yet, it wasn’t as if everything was hunky dory behind the scenes. The West Bengal plant in Singur was in the eye of a political storm with huge protests on the site. Even as the Nano was grabbing eyeballs at the Expo, ground reality in Singur was completely different. Would the people’s car be able to weather the storm?

It could not beyond a point and finally Tata announced a year later that the project would now move out of West Bengal. The Nano had found a new home in Gujarat, which literally lay down the red carpet for Tata Motors. It was the beginning of an auto wave in Gujarat where the Nano would pave the way for Maruti Suzuki, Ford and Peugeot.

After the exit from Bengal, it was clear that a lot of momentum had been lost. Reports of the car catching fire on roads did little to enhance its standing. However, the most awkward association become the ‘cheap’ reference, which deterred buyers.

It was only some weeks ago when the Indica bid adieu 20 years after it debuted at the 1998 Auto Expo. It’s quite likely that the Nano will follow suit someday. Yet, it will be still be an important part of India’s automobile history.

Published on July 05, 2018

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