The most important car in years?

Although I've put a question-mark behind the title of this post, I think the just-announced Tata Motors 'Nano' car really is the most important car to come along in years. It's certainly got other major manufacturers thinking hard, with Volkswagen, Ford, Renault and Nissan already announcing plans for their own bare-bones vehicles.

The reason it's so important is simple: the base vehicle costs only the equivalent of $2,500. That's right - two and a half thousand dollars. Tata is based in India, where there's an immense pent-up demand for transport but very little in the way of low-cost alternatives to the scooter or bicycle (unless you count the donkey cart!). As Mr. Ratan Tata, chairman of Tata Motors, has said; "I observed 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. It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family."

They certainly seem to have succeeded. The Nano seats up to five, has a 33hp. 623 cubic centimeter (38 cubic inch) rear-mounted engine with continuously variable transmission (meaning no clutch or conventional gears) and an adequate if not stellar performance (maximum speed about 60 mph) and claimed fuel economy of about 50 mpg. There are no frills: manual windows, no air-conditioning or carpets, just bare-bones transportation.




And when you think about it, isn't that long overdue? For the vast majority of car owners the Nano will address all their real needs. They aren't taking long trips through the countryside, or loading up their cars with large numbers of people. As a city commuter car this has real possibilities (perhaps adding a small air-conditioner for those long traffic jams). It probably wouldn't be very comfortable for a multi-hundred-mile journey, but those who make such journeys will buy more suitable vehicles anyway.

Furthermore, its small size and lack of power-draining accessories make it a perfect candidate for conversion to battery power once the new generation of capacitors hits the market (for an example, see here). Already they're achieving three to four times the battery life (or range, in car terms) of what's available today. Once you can install a battery and electric motor giving two to three hundred miles between plug-in recharges, this becomes a perfect city and suburban vehicle. The added expense of the electric drive may push the total cost into the $4-$5,000 range, but even so that's very affordable.

It has wider economic implications. Ratan Tata again:

"What we also wish to do, which is still not fully clear and a concept at this point of time, is to create any opportunity for entrepreneurs. Low cost units in different parts of the country will assemble the car where Tata Motors will take the responsibility for training on site and other aspects related to quality etc. We will give young entrepreneurs the opportunity to establish enterprises in distributed areas to produce this for us. We will produce all the high volume parts and send them as kits to these assembly units. This will also enable us to address some international markets in Indonesia, Africa etc on the same kind of basis.

So what we are looking at is designing a product that can be produced in high volumes, which we will do and than can also be viable in small volumes on a batch-basis from kits. With many products, if you conceive them for mass manufacture they cannot be produced in another form. This is what we are trying to do. It is taking more time because we have given ourselves a more complex situation, says Tata.

What he would like to see ideally, in the India of tomorrow, is 10 young graduates getting together out of an IIT and saying, Instead of having to work for somebody, we would become an enterprise of our own. He adds, Hopefully we would like that enterprise to also sell the vehicle in that area. We would like the service engineer to be trained by us that could perhaps serve the customer. He could use the spare parts of this enterprise to service the customer. Can we change the traditional manner in which the customer is supported on the product?

Eventually, the idea is to not only to give India a low-cost car but create many jobs in different places for young people who otherwise would have to work for someone."

This is potentially huge. Instead of needing large factories all across the globe one could look at decentralized assembly and service facilities - with all the reduction in environmental impact that such a step promises.

A small prediction, friends: this car will be worth watching. It'll also be interesting to see how the 'traditional' car manufacturers respond to the challenge. You can bet they really, really don't like what Tata has achieved here. I look for them to try to either shut it down, or beat it to death with their own competing models - which will promptly disappear from the market if they succeed.

I'm sure there'll be lots of bumps in the road ahead (you should pardon the expression) and problems to be worked out, but I think we owe Mr. Tata and his company a resounding vote of thanks for driving this project forward. It might just change the car market worldwide as we know it. This should be interesting!

Peter