Ratan Tata wanted to repeat what Harrison Ford did a hundred years back, but followed an absolutely different road. Ford went the natural way, made normal cars and sold them at profitable prices, increased the volume in steps while reducing the cost, and sold newer and newer versions at lesser and lesser prices, making history as he went, making it the largest selling car in the world.
But Ratan Tata went the other way round. He yelled out at the very beginning that he was going to make the cheapest car in the world. Instead of using a proven design, he chose to build an all new design from scratch. While he could have used several of the existing production lines of the company, he rather chose to build a whole new production facility exclusively for Nano.
All of these went wrong and Tata created the biggest ever business disaster of its kind. The enormous cost incurred in the new design, as well as the money spent in raising the new factory, all forced Tata to raise the price of the car, thus loosing its only advantage among rivals. And, after the car rolled out of the factory, it began showing off some of its design glitches. When a few Nanos caught fire on the road and made headlines in the media, it spoiled the credibility of the brand far beyond repair.
And it probably was too late when Tata realized that it was not always the cheapest that sells. Maruti 800, the competitor for Nano, and the best seller car yet, did not sell in India because it was the cheapest. Maruti 800 was the most superior product in India at the time of its launch, and even for a decade further there was no car to match its quality. And until the mid 1990s Maruti 800 was not even the car of the common man, rather it was the car of the wealthy middle class. The common man always looked up to it and wished to buy it.
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| Interior of Tata Nano: A view of the dash, steering wheel, center console, gear lever, and the pedals. |
But the case was different with the Nano. Not only that it came branded 'cheap', it had a deprived look and feel. Despite the cute looks from the outside, when you opened the door and looked at its interiors, the picture changed. There was 'cheap' written all over there. The interior finish, the seats, the steering wheel, even the gear knob was sub-standard. It was not a car that you would wish to buy, rather what you'll be forced to buy because you are poor.
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| "Another Nano catches fire" Breaking news on CNN IBN reporting a Nano on fire in New Delhi. |
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| Picture of a Nano on fire in an online motor magazine |
The fires waived the confidence.
An engine housed under the rear seat with the radiator vent facing backward and on the sides allowing only a lesser air intake, meaning lesser cooling, along with more plastic/polymer elements (part of the cost cutting as well as weight reducing measures) in the inner panels, caused serious safety concerns even before the launch.
And some of these concerns were proved true whan a few incidents were reported in which the Nano caught fire, some of them when parked and two when in motion. All the fires originated from the back of the car when the engine was housed. Tata made modifications for fire safety in the newer versions. But the message was obvious: The car had design glitches. Might be corrected in the eventual releases. But why take a risk now?
The concerns.
Concerns of safety on impact.
The body panels of the Nano are of very low weight, aiming at a low overall weight to cope with the low power of the engine and a high mileage requirement in the market. This cause concerns of passenger safety during an impact/collision. Added to this is omission of a collapsible steering column. Tata claims to address the issue of the steering column with some work around, but is unconvincing. The variants Tata announced for the European market where abosolutely different ones with all European standard safety precautions including a collapsible column. So the educated consumer in India knew that Tata was giving them a deprived product.
Gradeability for the hilly Indian terrain.
With the shortest wheel base, elevated centre of gravity due to a tall boy design, and adding to all these, the engine placed in the rear (for a less complex and hence cheaper transmission) concentrating the weight on the rear, raised a concern of safe gradeability on an uphill drive. Tata addressed this specifically is the post launch ads.
Lack of power (for the highways).
The common man doesn't buy a car for shopping. A family car in India should be able to ride on the highways as well. Because more than as a daily vehicle, cars in India are family carriers used for occassional long distance tours. The 624cc engine raises concerns of inadequate power for four passengers over a highway. The transmission too was only 4 speed. This was a major issue addressed in late Nano ads.
And finally, there was an alternative: a used Maruti 800.
Why take all the risk when you have a proven alternative. The tried and tested Maruti 800. You can get a Maruti 800 in the used car market at around 1.75 lakhs. The reliability that the 1.75 gives is far better than the handful of headaches that you get for 1.4 lakhs (the new price of Nano).
Article first published on 17 February 2012.
