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Ratan Tata’s ace

Few products designed and made in India have been awaited as eagerly and with as much apprehension in some quarters of the auto industry and outside as the new, small car from Tata Motors that was unveiled on January 10, 2008. Explaining the sense of anticipation is child’s play, as a cartoon in this newspaper implied. A car for Rs.100,000 was the dream of four years for one man, Tata Motors Chairman Ratan Tata, who saw the peril in whole families riding on a two-whe eler and the need to offer them a car that would be much safer for travel, yet affordable. It was as much a dream for many of the seven million Indians who buy themselves a two-wheeler each year only because they cannot afford to pay a couple of lakh rupees for the cheapest four-wheeler in the market. Perhaps it was the slogan coined by management guru C.K. Prahalad about finding fortune at the bottom of the pyramid that pumped up the businessman and social entrepreneur in Mr. Tata and spawned similar low-cost products, notably Tata Ace and Ginger Hotels. Between the dream and reality was the challenge of putting on sale a car for a price no manufacturer in India or abroad was willing to countenance. So the visionary Mr. Tata and his flagship company, Tata Motors, deserve great credit for accomplishing what most people considered utopian, and reinforcing the point global automobile majors are now acknowledging: India is a natural home for “frugal engineering.” Inside the little Nano are some 20 innovations, for which patent applications have been made, and the genius of many engineers at Tata Motors and its suppliers. Mr. Tata may not have delivered precisely on the expected price but the Rs.127,000-130,000 tag (inclusive of taxes) is just 65 per cent of its nearest competitor, Maruti Suzuki’s venerable M 800.

Less edifying was the breathless chatter, in the run-up to the launch, of those appalled at the thought of the congestion such a cheap car would bring on the city roads and the pollution it would contribute. Even less informed were questions whether the car would be safe. Mr. Tata’s repartee was: would a person be safer on a two-wheeler than in a car with steel enclosures? It takes no deep study to predict that the demand for a reliable, fuel-efficient, cheap car will be huge, the numbers likely to be limited only by the ability of the manufacturer to produce it. Surely the just response to an imminent increase in the population of cars cannot be to deny the middle classes their vehicle while giving gas-guzzling behemoths the freedom of the roads. Rather the answer must be improving the public transportation network and expanding the infrastructure so that it accommodates many more vehicles, with tighter emission standards, without snapping into gridlocks. On launch day, it was evident that those murmurs of doubt and jealousy were drowned in the spontaneous applause for Ratan Tata’s small, cheap car. What remains to be seen is how long the company can produce it at this tantalising price.

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