WELCOME

TO
THE WORLD OF

BUSINESS EXCELLENCE 1
 NANO
THE
SAGA 2
CIRCA 2003 A.D.

3
 A DREAM IS
I observed BORN
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. Add to that the
slippery roads & Night time too.
It is downright dangerous.

It led me to wonder
whether one could
conceive of a safe,
affordable, all-weather
form of transport for 4
 THE RESOLVE
ort
sp
n
a tra
l op n d
v e h s a
d e h ic l e m
u l d w r ob
h o e p .
e s e s es
W th a s s
s es m
e s to
d r b l e
A d d a
- fo r
a f
-i s
5
 THE PRICE OF
BEING MISQUOTED
The car was not initially scheduledar be
to
c
priced at Rs 1 lac. c nd la a
1 r y
t show, a
In an interview, at Geneva motor
f u s
correspondent fromo Financial i n d Times of
London asked w s Mr. e Tata about his
e th .people’s car and
projected priceN dof the c k
e f e
i aboutt u
Mr. Tata
T h tr i
replied s Rs 1 Lac.
c i ce
The nextl e day r the paper quoted that Mr.
Tata’seshalle p
roll out a car for Rs 1 Lac.
th 6
AND THUS BEGAN A
JOURNEY

7
 WHAT SHOULD WE MAKE??
 A scooter with two extra wheels at the
back for better stability?

 An Auto-rickshaw with four wheels?

 A three wheeled car like a closed auto-

rickshaw??

 A four wheeled car made of Engineering

Plastics?
8
WHAT SHOULD WE MAKE ?? Contd.

S I ON
 A Four wheeled rural E C I
car?
V E D
C U TI u ild
EX E e b
if w a n d
d
 Rolled up Plastic ccurtains a r an a cain r
,
place of
t s a b e s ay
windows? w a n ou l d o u l d
r k e t it sh p l e w r
m a a r p e o f o u
The ople’s c g that w ith ou r
e in te r f
a p ometh s c o o w ith
o t s a sh a w
 n
Openings like Auto j u s t r i c k
rickshaws from the
at ’ s ut o - r . ”
side instead T h of aa n a
door? a C a
h ! r y
“A ls, o re all
h e e n o t
w l s &
h e e
 w
A four wheeled open car with safety side
bars? 9
HOW MUCH TO MAKE??
THE DEMAND
PROJECTIONS

10
THE DEMAND - PRICE RELATIONSHIP

t at
Poin and
DEMAND

r ic e em
P d
h ich lodes
w
ex p

PRICE
The demand rises slowly till the threshold
price point beyond which it rises
11
 THE DEMAND PROJECTIONS
It was estimated that the demand for the people’s car
shall be at least twice the demand for Maruti 800, the
lowest end car. Initial projections were at about p500 er K
cars per year. a rs in
s c e s ,
l c
a s t ag
h 5 in
The basic reason was the conviction it upthat the target
w
price shall redefine the 4 - wheeler n ts msegment.
e
p l a s a .
u p t h e n d
t
e Rsmp m a
The price decision sof a 1 lacd e is definitely going to
to dr e t
make a lot many e d people
a n a rk
transit to 4-wheeler fold and
c i d t y m
e
that shalldexplode a i
c the n
i demand.
as cap reas e
t w c
If Ionly
n
u m
10%
n ith in customers of 9 Million two wheeler
a w
market etransit to 4-wheelers it shall amount to 50% of
lin
the passenger car market share. 12
THE CUSTOMERS’
VOICE

13
 THE SCEPTICS
 It is impossible to build a car at such a price. No
e r
one has been able to do it so far. It is rjust th nnot
f u w
possible. a s r o
w hei
 It will be more like a scooter withanad roof. g
t I am sure
p
u cost in
d of two bikes.
no one can make the car fordthe d
an rs a
 It shall be a half car with upnotiroof.
to I doubt if it will be
in g p e
i
able to go up thet pflyovers.l o m
p c
k e the s.
 It may beliean f upgraded
y io n Auto-rickshaw with plastic
e b lat
body.disItbshall
d e d beca
e
u very unsafe car as the very idea
e u n sp
Th1 m
of po car
Lac
theis too far fetched to be true.
co te to
 It shall
mi never meet the emission norms. We shall
choke on the poisonous emissions from this car. 14
 THE FENCE SITTERS
 IT HAS NOT BEEN DONE EVER. Even the nearest
car is double the cost. Let us see what Mr. Tata can
b e
do to maintain the price line.
it to eir
h ed g t h
w is sin
 I am not very convinced but would re s
le definitely go for
p
o exp
it if it is safe. e
e . P ut
o n b o
e d s a
ix i u
o of 4 in this car. I wish
 I hope I can takea my m family
u t
s
a dream c a
Tatas make this w ry a reality.
io n v e
a ct ere
e re t w
 IThknow b u the. talk is that it is a myth. However
ru e ism
t
miracles i m do happen. Let us wait and watch.
t
op
15
 CONVERTING THE
CUSTOMERS VOICE

16
 THE ORDER QUALIFIERS
 It must be a safe car.
Must meet the mandatory Safety Standards. h ad
a n d so
u t n d
 It should not emit poisonous fumes. l t o ta .
p e den rms
y s v i o
rl e n
Must meet the mandatory lEmission e a ery norms.
t o ry
c v la
e ry as g u
 I should be able to e v w er e
e r sits mcomfortably
th in it with my
w tic i ll
family. n s p o a
tio c e t
c ta e s form
It shouldx pe . have
T h oadequate
c
n space to at least 4
e e e t o
persons.
T h b e m ad t
to car h
 It should look like a car and not a contraption.
the
To have a good ergonomic shape. 17
THE ORDER WINNER

PRICE TAG
OF
Rs 1 Lac

18
STRATEGIC IMPERATIVES

19
 THE STRATEGIC DECISIONS
 The car to cost Rs 1 lac on road.
ile
o b
o m b le
 The car should be built on a different platform u t p athan
A
n re c a r s .
conventional ones. d ia a n e
I n e w in
th e t w hy
o r t h a ort
 It must be meeting all the f safety d and regulatory
w
o n o l
r ou t
requirments. c
a ew e
b e h m
a o t c o
b e et d
 It has to u be t v
built
s ro on a
a nscale which shall be more
m p g e
r n
thancadouble a nd athe
lle earlier launches of similar
h e try andcthe
products h ramp up must be smooth.
T us n y
a
ind ake
 The o tcar has to be designed so that it can be
t
exported to other countries as the domestic
demand may not materialise as per projections.20
 THE TECHNOLOGICAL IMPERATIVES
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 be
redesigned.

Rather than a Sustaining Technological Imperative

we have to go for lateral thinking and adopt
Disruptive Technological imperatives.
The design has to question the need of each and
every component from the point of view of its
necessity of existence and also the minimum
requirements of its functionality. Value
Engineering concepts have to be deployed to
finalise the minimum requirements.
21
THE TECHNOLOGICAL IMPERATIVES Contd.

Sustaining Technology:

• Type of Technology that seeks to improve

the performance of Existing and new
Products thru' incremental improvements.
• Includes Incremental and sometimes
Radical Innovations thru' translating
Customers' Voice into product attributes
and incurring investments in R & D.

• These Technologies foster improved product

performance along the dimensions of
performance that the Customers have
traditionally valued. 22
THE TECHNOLOGICAL IMPERATIVES Contd.

Disruptive Technology:
 Is a Technology that brings radical change
by introducing new ways of doing things
usually at a much lower before.
 A Technology that is:
 Significantly cheaper than existing Technology.
 Is much higher performing.
 Has greater functionality and
 is more convenient to Use.
 Brings to market a totally different Value
proposition than the one available and can
change the Paradigm about a product. 23
 THE COST REDUCTION PARADIGM
Value Engineering Alternatives:
The Guiding factor was that the costhhas at alto l be
d t c
minimised for each component
e L a yet
f in 1 a
maintaining its basic functionality. d e of t d
e be
The Alternatives are: r ly ure oca to s.
l ea ct a l
l ad ive
 Reduce Consumption y c tru be h a t
e of Material
r t s to being e rn used.
v os e a m lt e
a s c s
vgetesame a material at
 Alternate Suppliersw n sh to a h bl e
t e
e giv nt nd ila t
less g
prices.
ar hematerials.
 Use alternate
t n e e a va
h e nt p o ic e a
T i m p r th
th use
 Eliminate
i c o ofmMaterial.
n g
w h e u
t xim usi
 Eliminate a a d
process.
e
m iev
c h
a Or a Combination of the above. 24
 THE COST REDUCTION PARADIGM
Locational Imperatives:
The Guiding factor was that the tax structure, a ll
on materials and manufacturing, e re must
w h
support the final cost of Rs 1 Lac i o n ed .
The Decisions were: t
a ie v
c
lo ch
in g a
r
tu ld b e
 Establish factory in auftax c
a free u zone.
n sc o
a
m age
a
t an t
 Get the etax c
le dadvantages
v on infrastructure
s
rt the a
development.
h o
s
In the suppliers to establish base near the factory.
 Get

 Get special concessions from State Govt.

25
 THE COST REDUCTION PARADIGM
Supply Chain decisions: o f
iv e p
c t h i
Guiding factor was that the ssuppliers p e e s
r , to be
e r r tn er
selected on the basis of their e p pacceptance
a eth to
th o f og
work on tight cost guidelines. m u t t
The Decisions points were: f ro e o wim n. G
s g
er era of uati s o K IN
l i
p lev ive sit I N
 Suppliers’ Technical u p capability
t to tweak F S
the design.
t s u m j c
e WI N O
l e c i m ob O N
e
 Theirrt swillingness a x h e WIN T I
o m ht a to be E S a part of the
s h in g it n g Q U
prestigious
In eriv rly project. w a t i O
 Theird willingness
a c r e toBE N
establish their facilities near
c le
the car manufacturing T O plant.
A D
E H
E R
 Their willingness to work on tight cost and time
TH
deadlines.
26
A DREAM IS REALISED

27
 THE CAR PER SE
 Engine Capacity Bosch 624 c.c. twin cylinder
Low capacity, Lighter ,sufficient with better
Power weight ratio
 Rear Engine to reduce the transmission
length 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 smooth
28
 THE CAR PER SE
 Dimensions L: 3.1m, W: 1.5m, H: 1.6m
Less length but more inner cabin space due
to height. Comfortable leg room.

 Independent Front & Rear Suspension

Mcpherson Strut in Front & Coil spring &
trailing arm in rear.
Better ride than Maruti 800.
 Single piece ribbed steel body with safety
features such as crumple zones, intrusion
resitant doors, seat belts, strong seats &
anchorages.
Safety requirements are adequately met. 29
 AN EPITOME OF SMART ENGINEERING
 Single Wiper in place of two.
Cost effective yet functionality is met

 Tube less Tyres i c t c

e r d l a
Weight reduced by 2naKg.
1
l v Costs reduction 200
F i R
S vehicles
Rs. And in line ewith modern
T
Th OSC
R
CA
 Instrument console
E
in the centre
H
Elegant to Tlook at and can be used both in
Left Hand & Right hand version.

The list goes on and on. 30

CRY OF THE SCEPTICS
&
MYTHS DISPELLED

31
 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.

32
 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.
 It’s Multi Port Fuel Injection system is controlled
by an intelligent Bosch Engine Management
system which controls the combustion cycle
precisely to ensure compliance to all emission
norms. 33
 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 Indian
roads.

 The car has a matching acceleration to Maruti 800

and also a good top speed. Although the
manufacturers have estimated 90 Kms as the
maximum speed the car can go upto 105 Kms per
hour top speed.
34
 MYTH No. 4
Nano has very Little leg room
 Although the car is 8% smaller than
Maruti 800 it has lot of extra leg room at
front as there is no engine compartment.
This also leaves sufficient knee room at
the 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 wheels
having been put at the corners have freed
up lot of in- cabin space and although the
car may be registered as a four-seater,
three slim adults can sit comfortably 35at
 MYTH No. 5
Cheap means Uncomfortable

 More comfortable than some of the cars

selling 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 the

trailing arms with coil springs are not
found in cheap cars. rear.
36
 MYTH No. 6
It’s very difficult for a rear - engined car to work.

 Rear engines work in many cheap as well

as 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, under

the 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 on
either side behind the edge of the doors,
which allow air to seep in for both cooling
37
 MYTH No. 7
There is a shortage of storage space.

 There is some storage space although not

much.

 The rear seat with parcel shelf folds to allow

accommodating a large suitcase.

 Small articles can be placed under the

bonnet also.
38
 MYTH No. 8
Cutting Corners is evident everywhere

 Cost cutting is done by smart designing

rather than taking out the essentials.

 One wiper has been taken out but the functionality

is intact. Wind shield washer fluid jets are
mounted on the wiper itself rather than the body.

 Wheels are held by three bolts instead of

four.
 On the contrary, MRF tubeless tyres and
all Alumininium engine, have been used,
which are more expensive than
39
THE MARK OF A MAN

“ Since we started the

project more than four
years back, there has
been a steep increase in
the input costs

BUT A PROMISE
IS
A PROMISE
40
 EXCELLENCE IS AN ENDLESS JOURNEY
LIKE WALKING TOWARDS THE HORIZON

NO MATTER HOW FAR YOU WALK

IT DOES NOT CHANGE
WHERE THE HORIZON IS 41