MEET TATA'S NANO

By Chippla Vandu

Wednesday, March 26, 2008.

For the past couple of weeks, I had eagerly been awaiting the 2008 Delhi Auto Show. The reason for this was no other than the unveiling of Tata's people's car—the Nano.

Meant to cost 100,000 Indian Rupees -equivalent to UK £1300 and $US 2,555 - at today's exchange rate - Tata's relatively small, yet seemingly attractive car is aimed at providing a much better and affordable means of transportation for middle and lower class Indians. It currently has the enviable title of being the "world's cheapest car."

Information on the Nano can be obtained from the car's website. It is not my intention to duplicate such information in this magazine. However, the Nano's fuel efficiency at 20 km per litre or 47 miles per gallon, does appear impressive when compared against most automobiles on the road today.

Based on information from the United States Government's Fuel Economy site, the average passenger car used in the United States, and manufactured in 2007, does about 27 miles to the gallon at best.

The Nano would likely succeed in achieving one of Tata's goals—apart from making money— that is, providing an affordable means of transportation, which directly competes with motorcycles that dot Indian cities today.

Though certain European mainstream media have criticized the Nano as being unsafe and also an environmental disaster waiting to happen, they either seem to totally miss the point or are so consumed with the fear that it might one day be exported to the shores to Europe.

The Nano isn't being built to compete with a standard BMW, Audi, Honda or whatever well-known brand one may prefer. Rather, it is targeted at a market currently filled with millions of non-car users, most of whom would never in their lifetimes be able to afford brand new or second-hand cars, either locally manufactured or imported at current prices.

And this market extends way beyond the shores of India; it is to be found in much of the Caribbean, Africa, Latin America and Asia.

Automobile factories in parts of Africa churn out cars, which most families only get to see and never drive or own. The same goes for India. By contrast, in much of Europe and the North America, most families are able to afford cars.

It appeared that if the people could not come to the car, the car had to come to the people. A starting point entailed challenging existing design philosophies about cars—that they must be big, fuel guzzlers, very fast and extremely safe. That's exactly what Tata did. And the resulting product could likely open to it new market niches in developing countries that its competitors in the global automobile industry would struggle to get into.

Automobile makers, irrespective of where they are located, will surely closely watch what becomes of the Tata Nano. With Western European car sales set to fall in 2008, according to information on the Auto Industry website, European auto makers will work hard to gain a larger share of the automobile market in places like China and India, in order to keep shareholders happy and remain in business.

A presence in China, India and parts of Asia is thus becoming a conditio sine qua non to many multinational companies (automobile makers or not), largely headquartered in the United States and Western Europe. Sometimes though, multinationals become self-obsessed that they either fail to see the need for change or the need to adapt to new ways of thinking in these markets.

And yes, maybe its time for a change in the global automobile industry. That change would not necessarily be the Nano or whatever competing products may follow. But that change could indeed be sparked by the Nano. Computer prices have fallen drastically over the years, making them affordable to more people across the globe. Who says the same can't happen to cars?