Wednesday, April 8, 2009

Tata Nano – An Indian Product or a Social Revolution?

Buzz It
Finally, one of the most awaited cars, in the automobile industry has been launched, which completely redefines the notion of owning cars. Cars, thought to be a thing of luxury, always eluded the common man, due to their high prices. The car is based on a vision from Ratan Tata, who 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. We are happy to present the People’s Car to India and we hope it brings the joy, pride and utility of owning a car to many families who need personal mobility.”
With such a vision, the new Tata Nano focuses on not only the 10% Indian population which has an access to the other automobiles, but also to a huge percentage of population who can overstretch a bit from buying a new two-wheeler or a used small car to getting their own Brand New Wheels in the form of the “People’s Car”.


What is so Special about the Brand – Tata Nano?
Ever since it was conceptualized, the other players in the automobile industry were pessimistic about the feasibility. The Suzuki, the Hyundai, the Renault etc., anyone and everyone in the automobile industry had commented that the Tata dream of a People’s Car was just a figment of imagination and making a car at this low a price without compromising on quality is not possible. This very fact makes the Nano special. It is a brand that defines the Entrepreneurial Dream of an Indian, coupled with the hard work, dedication and determination of a team who believed in and worked for converting this vision into reality.

What is also heartening to see is that instead of making it look like a “cheap car”, the initial look and the comments and reviews from some of the people who test drove the car suggest that it is fares pretty well with its stylish looks, spacious interiors and a good quality drive coupled with a never ever before rock-bottom price tag. The car takes its tagline “Now You Can” from the Obama campaign and actually lives up to it.

On a personal note, Tata Nano even represents a triumph when it comes to a battle between Politicians and Industrialists, the base of which is present in my blog post about the Nano saga. India, the biggest democracy has its share of politicians who try to put “speed-bumps” in any development that happens, to use it for their own selfish purposes. Without going into details, the opposition party of West Bengal opposed the Tata Nano’s factory to be opened and demanded return of 400 acres from the 1000 acres which were allocated by the State Government. This was done on the assumption that since Tata Motors had invested a hefty sum into the Singur factory, they would cave-in to the demands.
Instead of giving in, Tata abandoned the incomplete plant and shifted the facility to Sanand, Gujarat, which not only baffled the people, but also showed the fact that the industrial sector of India is no longer weak and the Politicians cannot change things at the last minute based on their selfish interests. Thus, this Indian brand, with people speculating against it even before its conceptualization had happened, has come out successful defying all the odds.


Political Impact of Tata Nano Roll-out

The name Tata Nano is in itself a project of pride to Indians. The completion of this project changed the name of the Indian Automobile globally, from an industry where people just fixed the auto-parts made in foreign lands, to a place where innovations and research can happen and even reach new heights.

The pull-out of Nano from Singur is not good news to West Bengal, and has also resulted in tarnishing the already bad image of the state in the eyes of the industrial investors. This also led to loss of potential jobs that the new Nano plant, and its dependency industries, would have generated. We still see that Mamta Banerjee is still harping about her “achievement” of not allowing the Nano to settle in peace. Hopefully, the people of the state will see the light of the day and vote reasonably in these elections to ensure that a good Government comes in full power, and such embarrassing event never happens in the state again.
On the other hand, Narendra Modi’s Gujarat Government added another feather to their cap of achievements. With his dynamic speed, ability to convince and prompt action, Narendra Modi got not only the land leveled, but also got all the required documentation ready to roll a “red-carpet” for Ratan Tata’s favourite project. At the 4th Vibrant Gujarat Summit in January 2009, Ratan Tata said, “the Chief Secretory(in his speech) today quite rightly mentioned that two years ago I had said that if you weren’t in Gujarat, you would be stupid, I did said that and I am very proud that I listened to my own advice and that today I can stand in front of you and say that the fact is that I am not stupid any longer.” This statements from Ratan Tata, raised the bar of Modi Government for Gujarat to a new level.


Economic Benefits of Tata Nano Roll-out – To the Tatas and to the Customers

The Tata Nano is expected to roll out in 3 versions, the basic version is known as the Nano with no prefixes or suffixes. Next up is the Nano CX which comes with HVAC and central locking while the top of the line Nano LX adds power windows to the front doors. which are priced from the lowest around 1,00,000 which is from Pantnagar (would be around 1,30,000 on road) and the LX Model which will be around 1,80,000 which makes it still cheaper than most other cars in the same small-cars segment. This new car will not only be a saver in this recession time, but will also open the automobile segment to a whole new class of customers, who till now, could have only dreamt of owning a car of their own. Other than this, Tata group may think of exporting this “innovation”, though they are currently looking at only the Indian Markets. A new version is seemingly going to be unveiled in a couple years which have higher average and match European Emission Standards.

To the customers, the Tata Nano Revolution is going to help in seeing a cut in the prices in the other cars. This car has also made other players in the automobile industry interested and Bajaj Auto Ltd, the country's second largest two-wheeler maker has announced a joint venture with Renault-Nissan to produce a 2,500 dollar car as well. In yet another independent announcement, Japanese major Toyota announced a Rs 1,400 crore (Rs 14 billion) investment in its Chennai plant to launch a 'strategic small car' within next 2-3 years.

These things are good news to us the customers and also to India as a nation, which will attract not only the huge investments, but also new jobs and developments due to this. As for Tatas, they are getting set to start lapping up this new Market segment.


Living with Nano – Redefining our Visions
After saying all the good parts, this is one area where we might have a concern, though in long term. The presence of the new “People’s car” will surely empower a lot more people to own the car. This is going to have a direct negative impact on the traffic conditions, especially in cities like Bangalore and Hyderabad, where there are problems even now. Apart from this, the overall fuel consumption is bound to increase which may yield in further price hikes of petroleum products. The third addition on the same lines will be a problem of finding parking lots for the additional cars which will enter the system.

All said and done, the above mentioned fears will have lesser impact considering a few realities. The Singur Saga led to the postponement of the Nano roll-out and also the capacity is bound to be less now. From what I read, the Tatas are planning to roll-out some Nanos from Pantnagar and the full capacity will reach 3,00,000 cars per year only once the Sanand plant becomes functional. Secondly, with its sleek look and absolutely small 4-metre turning radius, the Nano will get fitted in even the smallest of places. This of course could cause issues with the other cars around it, but the Nano in itself seems a nice option. Another vision is that the Tata Nano will replace the auto-rickshaws in a big way and this I think would be a very welcome change for most of us.


Final Verdict and Personal Take:

With a few changes like no mirror on the Passenger side to save money, Nano does have some turn-downs, but my overall impression of the car is pretty optimistic. The new Nano is surely going to compete for being the first car for a lot, and a second car for another bunch of people. The impact of Nano release on the Used-Cars industry will be evident only once the Sanand Factory starts in a full-fledged way.
Till that happens, if you are a prospective Nano buyer, just pray that you win the Nano registration lottery and get your set of wheels sooner than others; and if you are in construction business, keep looking, we are bound to see a lot of Government Tender notices for building more roads and flyovers.

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