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NEW PRODUCT DEVELOPMENT

TATA NANO

Submitted by :-

Adhiraj Sengupta - 907


Amit Kumar Madaan - 911
Arif Masud – 918
Avinash Kumar – 920
Chaman Rai – 925
Kushagra Charan - 935
IDEA GENERATION
So , how did TATA known for making lumbering trucks come out with a “cute
as a bug “ car that its rivals could not built to a target price of 1 lakh?

“In India , a middle class family would travel by scooter in the classic, death-
defying Indian fashion. The father would drive with his son on the floorboard in
front of him and the mother seated pillion, cradling her infant daughter in her
arms. In India at that time, CARS for a young family were far out of reach and is
still the same.”- Ratan Tata

It all started with a dream which was translated into a reality on the 10th of
January, 2008 at the Auto Expo, Delhi.

The concept behind the creation of the People’s Car was to fill the status void
that was felt by the middle class families.

IDEA SCREENING

The next step was the screening of idea. How is this dream possible? What
should they make?

 A scooter with two extra wheels at the back for better stability?

 An Auto-rickshaw with four wheels?

 A three wheeled car like a closed auto- rickshaw??

 A four wheeled car made of Engineering Plastics?


 A Four wheeled rural car?

 Rolled up Plastic curtains in place of windows?

 Openings like Auto rickshaws from the side

 A four wheeled open car with safety side bars?

But the market wanted a car and if they build a people’s car it should be a car
and not something that people would say,“ Ah! That’s just a scooter with four
wheels or an auto-rickshaw with four wheels & not really a Car.”

Trying to build a car cheap enough for motorcycle buyers seems to make sense
now but seemed crazy several years ago when Ratan Tata, longtime chairman of
Tata Motors , first mentioned his dream of building a one-lakh car in 2003.
"They are still saying it can't be done," he says, insisting that it can and will.
After we get done with it, there will hopefully be a new definition of low-cost."

CONCEPT TESTING AND DEVLOPMENT

Before starting the project, Wagh did something no one at Tata Motors ever
had: He talked to customers. The three-wheeler men inevitably insisted on a
cheap, dependable truck that could go from village to market carrying, say, a
ton of onions or potatoes, one night, as sunset approached, Wagh stuck with one
rickshaw driver. He says, "I kept asking the question. Why? Why? Why do you
want a four-wheeler?" Wagh remembered. Finally, he got the real answer. It
turned out it wasn't really a problem of transportation of vegetables “If I had a
four-wheeler, I would have better marriage prospects in my village," the young
man said. Drivers of three-wheelers are looked down upon in India. Wagh
realized that four wheels had emotional, not just practical, appeal.

Thus the new product was now to be developed.

The car was to cost Rs. 1 lakh on road.

 The car should be built on a different platform than conventional ones.

 It must be meeting all the safety and regulatory requirements.

 The car has to be designed so that it can be exported to other countries as


the domestic demand may not materialize as per projections.

 The car must be a beacon for the Indian Automobile industry and prove to
the world that we are capable to take any challenge and come out worthy
winners.

That quest to build the world's cheapest car hasn't ended. The mission began
back in 2003, when Ratan Tata, chairman of Tata Motors and the $50 billion
Tata conglomerate, set a challenge to build a "people's car".
Tata gave three requirements for the new vehicle: It should be low-cost, adhere
to regulatory requirements, and achieve performance targets such as fuel
efficiency and acceleration capacity.

The design team initially came up with a vehicle which had bars instead of doors
and plastic flaps to keep out the monsoon rains. It was closer to a quadricycle
than a car, and the first prototype, even a bigger engine, which boosted the
power by nearly 20 per cent, was still dismal. But failure didn’t stop them
they quickly realized it was necessary to bring everyone on board. Every one
from manufacturers to vendor development teams were asked to be a part of
decision-making.

The body had to be changed because Ratan Tata, over six feet tall himself,
wanted it to be easy for tall people to get in and out of the car. The attention to
detail paid off: When the car rolled onto the dais at the Auto Show in New Delhi
in January, and Ratan Tata stepped out of the driver's seat with ease, it made
an immediate impact.

What shook the automobile world most was the fact that the designers seem to
have done the impossible: The sleek, sophisticated Nano didnt look flimsy or
inexpensive. If it had been an upgraded scooter on four wheels, Tata still would
have been applauded for making a family of four safer on Indian roads. The
Nano, however, affords both safety and status. "The innovation wasn't in
technology; it was in a mindset change".
BUSINESS ANALYSIS

Since the car had to be built within a cost of Rs. 1 Lac, no conventional design
would work as the costs shall be higher and so the entire car has to be
redesigned. What makes Nano so less expensive can be well understood from the
following diagram.

The design has to question the need of each and every component from the point
of view of its necessity of existence and also the minimum requirements of its
functionality. TATA used the concept of Disruptive Technology which was
cheaper than existing Technology, much higher performing, is convenient to use
and brings radical changes.

The Guiding factor was that the cost has to be minimized for each component
yet maintaining its basic functionality.

The Alternatives are:

 Reduce Consumption of Material being used.

 Alternate Suppliers to get same material at fewer prices.

 Use alternate materials.

The design was outsourced to Italy's Institute of Development in Automotive


Engineering, but Tata himself ordered changes along the way. Most recently he
vetoed the design of the windshield wipers. His solution: a single wiper instead
of two .

The target was very clearly defined that within the given cost structure of 1
Lakh all the components have to be allocated a maximum price and the same
had to be achieved using the available alternatives.

The Guiding factor was that the tax structure, on materials and manufacturing,
must support the final cost of Rs. 1 Lakh.

The Decisions were:


Establish factory in a tax free zone.

Get the tax advantages on infrastructure development.

Get the suppliers to establish base near the factory.

Get special concessions from State Govt.

 In short select a manufacturing location where all the advantages could be


achieved.

TOTAL SALES ESTIMATION

Now the question was, “how much to produce”

 It was estimated that the demand for the people’s car shall be at least twice
the demand for Maruti 800, the lowest end car. Initial projections were at
about 500,000 cars per year.

 The basic reason was the conviction that the target price shall redefine the
4 - wheeler segment.

 The price decision of Rs 1 lakh is definitely going to make a lot many


people transit to 4-wheeler fold and that shall explode the demand.
 If only 10% customers of 9 Million two wheeler market transit to 4-
wheelers it shall amount to 50% of the passenger car market share.

 It was decided to set up plants with 5 lakhs cars per annum capacity and
ramp the same up in stages, in line with increase in market demand.

PRODUCT DEVELOPMENT

And finally the product was developed with the following features.

 Engine Capacity Bosch 624 c.c. twin cylinder.

 Low capacity, Lighter, sufficient with better Power Rear Engine to reduce
the transmission length using a balancer shaft.

 4 Speed Manual Gear Box.

 All Aluminum Engine.

 Higher thermal conductivity than cast iron, Lighter and so better mileage.

 Engine Management System by Bosch

 Superb control over emission and smooth acceleration.

 Dimensions L: 3.1m, W: 1.5m, H: 1.6m

 Less length but more inner cabin space due to height. Comfortable leg
room.
 Independent Front & Rear Suspension McPherson Strut in Front & Coil
spring & trailing arm in rear.

 Better ride than Maruti 800.

 Single piece ribbed steel body with safety features such as crumple zones,
intrusion resistant doors, seat belts, strong seats & anchorages.

 Safety requirements are adequately met.

 Single Wiper in place of two.

 Cost effective .

 Tube less Tires.

 Weight reduced by 2 Kg. Cost reductions 200 Rs. And in line with modern
vehicles.

 Instrument console in the centre

 Elegant to look at and can be used both in Left Hand & Right hand version.

COMMERCIALIZATION

It will be commercialized in whole of India. It is mostly targeted to the middle


class and lower middle class people.
INNOVATIVE MARKETING.

Tata will sell its ultra cheap new car through its own retail and electronics
megastore outlets as well as auto dealerships

The Rs 1 lakh car, which broke new ground in design, engineering and
production processes, will opt for "cost-effective and innovative use of media,"
say people with knowledge of the Nano marketing strategy.

To make the car more easily accessible to people, the Tata Motors team will sell
the Nano not just through Tata car dealerships across the country, but also
through conventional retail outlets like Westside and Croma.

Westside and Croma outlets will display the Nano and also take bookings. Also
available will be a whole range of Nano merchandise like baseball caps, T-shirts
and key chains, among others

The Nano's overall marketing strategy will use conventional media in an


unconventional manner. Unlike most small cars, (Nano won't be big on
advertising. There will be no TV campaign, only innovative use of print, radio
and other media, particularly the web. The Tata team is working on Nano news
in papers, Nano breaks on radio, Nano appearing in the form of messages or
ticker news on TV, online Nano games, Nano chatrooms on the Net, Nano pop-
ups on major websites and Nano conversation on Facebook, Orkut and
blogspaces).

According to people in the ad industry with direct knowledge of the Nano's


marketing strategy, the campaign will be cost-effective and innovative so that
Nano becomes synonymous with anything "small, cute and brief." "The idea is
to make the Nano part of our everyday lingo like 'see you after a nano,' it's a
totally word-of-mouth campaign," said a person familiar with the Nano
marketing strategy.”
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