1. Prepared By:
Giffin K. George
Sundeep S. Kentigal
2. Tata Group is an Indian multinational conglomerate
company headquartered in Mumbai, Maharashtra, India. It
encompasses seven business sectors: communications and
information technology, engineering, materials, services,
energy, consumer products and chemicals. Revenue US$
100 billion (2011-12) Profit US$ 5.23 billion .
Tata Motors Limited, formerly known as TELCO (TATA
Engineering and Locomotive Company), is a multinational
corporation headquartered in Mumbai, India. It is India's
largest passenger automobile and commercial vehicle
Was established in 1945. The company manufactured its
first commercial vehicle in 1954 in collaboration with
Daimler-Benz AG, which ended in 1969.
The company has 6 manufacturing and assembling Plants
located at Jamshedpur, Pantnagar, Lucknow, etc in India.
3. Tata Nano
Nano - the Dream Car is a rear-engine, four-seater Passenger Car from
the house of Tata Motors.
Tata motors surprised the world by launching the worlds’ cheapest Car
Nano in the year 2008.
Nano majorly aimed at Two-Wheeler users.
Nano is also known as Lakh-takiya Car because of its price (Rupees One-
Company started its production in the year 2008 at Singur plant.
The car itself is expected to boost the Indian Economy, create
entrepreneurial-opportunities across India, as well as expand the Indian
car market by 65%.
Ratan Tata kept his promise and unveiled Tata 'Nano' on 9th January
2008, at the 9th Auto Expo 2008 at Pragati Maidan in New Delhi.
> One lakh rupees Car, against WEAKNESSES
increasing steel prices. > Safety
> Fuel-efficient. > Light vehicle
> Fashion of Compact Cars in India. > Not suitable for hilly areas
> 21% more Spacious then Maruti 800
& Trusted Brand
> Two wheeler users THREATS
> Global market like India, China, etc. > New Model of Bajaj Autos
> Growing population of Middle class Limited RE60.
and Lower Class who controls 59% of > Light vehicles like
total income in India. Spark, Alto, Eon etc.
> All the users of Maruti 800, as its > Second-hand users
production is stopped by the company.
5. “Dream, dream and dream – because
dream gives vision, vision gives thoughts
and finally thoughts lead to the action".
Each letter of these motivational words
said by India's former President Dr. A.P.J.
Abdul Kalam goes exactly with Mr. Ratan
Tata, Chairman of Tata group, who in the
year 2003, dreamt of producing a Safe,
Affordable Car for the common man.
7. The project was given to Mr. Girish Wagh & his team included another
innovative person Mr. Narendra Jain who was credited with the 1st
gasoline engine made by the Tata’s.
The main driving factor for re-engineering & innovation was LOW
After number of experiments they built a optimal engine of 624cc with
a 34 bhp which gave to another innovation of high pressure diecast
engine in India.
They had to re-engineer lots of parts of the car which included:
Door handles – 70% less parts than one of the cheapest European cars.
Hollow steering shaft – lesser weight.
MRF tires - redesigned to bear extra weight on the rear.
In some of the cases the cost dropped by 60%due to their out of box
8. Plastics & adhesive replaces welding.
1 wiper instead of 2 wipers.
Got the suppliers to establish base near the factory, extremely good
supply chain they made “Completely Knocked-Down” kits (CKD) so that
the distributors could assemble them at their own workshop.
To enable cheaper assembly they glued the parts instead of welding them.
10. The strategy of the project was the awareness of the number of Indian
families who had two wheeled transport, but couldn't afford a four
wheel car, and was based on the company's success in producing the
low cost 4 wheeled Ace truck in May 2005.
Tata Motors had an idea that they would come up with low price car
which would be affordable to low income groups & people in the rural
Tata Motors set their retail price target before they designed the car.
Doing so let them establish their demographic areas.
Setting the price and working backwards also required a fundamental
shift in the way the car was designed, since many costs are fixed once
the design is set.
Tata Motors worked in collaboration with their suppliers very early in
the process - so early in fact that they were able to provide functional
goals for many parts rather than technical specs.
11. Another cost cutting strategy - ‘Tata Motors' distributed assembly model, where
they ship the parts to local manufacturers for final assembly.
The interesting challenge here was that aiming for a very low cost car meant the
entire organisation had to be leaned down - not just manufacturing, but
materials, design, human resources, and so on.
The team has taken the benefit of best practices from other industries such as
cycle manufacturing or PC manufacturing that involves mass manufacture and
The Nano has 21% more interior space and 8% smaller exterior, when compared
with its closest rival, the Maruti 800. The car will come in different versions,
including one standard and two deluxe variants. The deluxe version will have air
conditioning, but no power steering.
With a length of 3.1 metres, width of 1.5 metres and height of 1.6 metres, with
adequate ground clearance, it can effortlessly manoeuvre on busy roads in cities
as well as in rural areas.
One of the most significant dimensions of innovation is its modular design. The
Nano is constructed of components that can be built and shipped separately to
be assembled in a variety of locations.
12. Tata have called this 'open distribution' innovation
because it mobilizes large numbers of third parties
to reach remote rural consumers, tailor the products
and services to more effectively serve their needs,
and add value to the core product or service through
Tata Motors had a idea because he had a dream that
people from rural areas &low income group has 4
wheeler car which would be affordable to them.
14. No benchmarks made the task difficult and often
“Go beyond just the usual cost reduction exercise. Show
the world the ingenuity of Indian engineers” said RNT
urging them to include him in their team.
“Only countries like India or Pakistan can make such a
low cost car in the world”, concluded RNT.
These words of RNT had a far-reaching effect on the
product development team.
15. The top leadership, involving Mr Ravikant, Managing
Director, was tasked to continuously motivate the
The team was often exposed to competitors from
around the world, which was turning out to be tedious
for the entire team.
For example in the task of engine designing Jain did
150 thermodynamic simulations, each of them
stretching from 8 to 10 hours
Components were critical and vendors played a
significant role, in determining costs of any
automobile. E. Balasubramaniam who was Tata’s Head
of Sourcing was greatly respected by vendors and he
convinced them to go down on their cost curves.
16. Girish Wagh told the car team that Indians wanted to
graduate from two wheelers to four wheelers for
emotional reasons. And the “average Indian” cannot
afford expensive four wheelers.
Jain searched globally for an engine that could fit a
small car. He even contemplated the engine of the
two-wheeler but gave up, as it didn’t produce RNT’s
dream car for the average Indian.
17. He then started designing the engine afresh. His first
product was one that delivered 20 bhp but that was
not sufficient. He increased the engine’s capacity to
554 cc, which delivered 27 bhp.
But it still did not have the required power .The
process went on till the capacity of 586 cc was reached.
And finally in October 2006, Jain built a 624 cc engine
with a bhp of 34. This was an optimal design. This was
the first time a high pressure die cast engine was made
in India. Compared to the first Maruti 800, which
delivered 37 bhp, Jain’s engine was more optimal. It
had a multipoint fuel injection system developed by
18. The engine appeared to have the zing to satisfy all
parameters namely low cost and acceptable
performance and conformed to all current and
potential regulatory requirements.
Tata Motors had a to develop an assembly kit for
distributors who would stock ‘Completely Knocked-
Down’ (CKD) kits of the car at warehouses and
assemble them on site. Transporting car in a CKD
condition is much less expensive than a fully
Finally, in Jan 2008 the car named was ready to be
showcased to the world.
Poverty is heterogeneous and context-specific,
livelihood systems are diverse and dynamic, and
operations need to be flexible and demand-led.
Working with upcoming technologies and groups.
Focusing on ‘Utility’ & ‘Cost’ aspects.
Setting up a good supply chain can deliver low costs
and high quality.
21. Tata Nano
Innovative Approach – Cut Costs, Meet The Schedule
and Eliminate Wastage. (E.g. Plastic panels, eliminating
Calls from various markets abroad.
22. Innovative Ideas put to action:
Low-cost AC’s and Water-Purifiers manufactured by
23. Tata Nano is being 'refreshed' to realise its full
"We were not prepared to market the car as we should
have. I think that has a lot to do with the fact that
momentum got lost," he told in an interview.
Due to issues like
insufficient advertising campaign, and
25. “…But they also received calls from Latin America,
Europe and Other countries in Asia. The either wanted to
buy the car or start its distributorship or wanted RNT to
setup a plant in their country.”
“The launch of Nano was big talk in Detroit Auto Expo.”
“It was the first major breakthrough after the world saw the
introduction after the world saw the introduction of the first
automobile by Henry Ford.”
- Carlos Ghosn, CEO Nissan Renaults
27. For the first time in history, a truly global middle class is emerging. By 2030, it will
more than double in size, from 2 billion today to 4.9 billion. Brookings Institution
scholar Homi Kharas estimates that the European and American middle classes will
shrink from 50 % of the total to just 22%.
28. Latin America
"Most countries in the region are on their way to becoming
middle-class societies; this represents a historic change,“
- Jim Yong Kim, World Bank President
• Rapid economic growth and more inclusive social policies in Latin
America in the last decade have lifted 50 million people into the middle
class, which for the first time rivals the poor in number.
• Poverty fell and the middle class rose.
• Roughly 30% of the population now falls into that category, equal to the
third of people still in poverty .
• At least 40% of the region's population has moved to a higher economic
class between 1995 and 2010.
29. “The potential market for such an affordable car is enormous throughout the
- Ratan Tata
Emerging markets are a fertile ground for innovation. The
challenge of reaching dispersed, low income consumers in
emerging markets give rise to significant innovation.
The strategy is not to sell the maximum cars to target
audience however to sell maximum cars to maximum
Companies which innovate on this dimension are likely to
be richly rewarded. World is getting tougher day-by-day
‘being unique’ is a competitive advantage & Tata motors did
the right thing by launching Tata Nano.
31. The company should focus on advertising & promotion of Tata
Nano which is critical for the sale of the car.
In the world of mass customization, the work of the marketing
department is restricted not only to developing more customer
but also to find out a way to strike a balance between customer
loyalty and customer satisfaction.
There is a problems in the area of services and distribution. Poor
service and absence of trained service personnel across the
country affects the growth of automotive vehicles especially
those of passenger cars. This case is similar to Tata Nano.
High prices of petrol, poor road quality and absence of poor
parking facilities in commercial and residential cities, pollution
and high taxes on four wheelers affect the market for four
wheeler automobile industry, of which Nano is no Exception.