Tata Nano

PROJECT MANAGEMENT

ASSIGNMENT
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Tata nano

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BACKGROUND NOTE
The history of Tata Motors dates back to the mid-1900s. In 1945, Tata Motors was incorporated
as Tata Engineering and Locomotive Company Limited (TELCO). The company was engaged in
manufacturing locomotives and engineering products. Three years later, it launched a steam road
roller in association with the UK-based Marshall Sons. Tata Motors Limited is India’s largest
automobile company, with revenues of Rs.35651.48 crores (USD 8.8 billion) in 2007-08. It is the
leader in commercial vehicles in each segment, and among the top three in passenger vehicles
with winning products in the compact, midsize car and utility vehicle segments. The company is
the world’s fourth largest truck manufacturer, and the world’s second largest bus manufacturer.
In March 2008, Tata Motors acquired Ford’s UK based car brands Jaguar and Land Rover (BBC
News, 2008). According to Ratan Naval Tata (Chairman of Tata Group), the need for an
innovation like Nano has got to do something for the people of India and transport.
Unavailability and poor quality of mass transport is a common problem in India. In a two
wheeler, father driving with elder child standing in front and wife behind holding a baby is norm
in this country. Thus, this is a relatively an unsafe mode of transporting a family. Thus, with this
in mind Tata Nano was created as a safer form of transport. As one of its objectives is to become
an Indian business conglomerate operating in many countries, Tata Nano will be introduced in
Malaysia.

Idea Generation

“I saw families riding around on scooters with kids standing up and the mother carrying a baby
and sitting pillion and decided to do something about it. It started as a quest for an affordable
transportation solution”. RATAN TATA

Nano - The Car

The introduction of the Nano received media attention due to its targeted low price.
The Financial Times reported: "If ever there were a symbol of India’s ambitions to become a
modern nation, it would surely be the Nano, the tiny car with the even tinier price-tag. A triumph
of homegrown engineering, the $2,200 (€1,490, £1,186) Nano encapsulates the dream of
millions of Indians groping for a shot at urban prosperity." The car is expected to boost
the Indian economy, create entrepreneurial-opportunities across India, as well as expand the
Indian car market by 65%. The car was envisioned by Ratan Tata, Chairman of the Tata
Group and Tata Motors, who has described it as an eco-friendly "people's car". Nano has been
greatly appreciated by many sources and the media for its low-cost and eco-friendly initiatives
which include using compressed-air as fuel and an electric-version (E-Nano). Tata Group is
expected to mass-manufacture the Nano, particularly the electric-version, and, besides selling
them in India, to also export them worldwide.

The Nano had a 623 cc rear engine and a rear wheel drive. The engine was a two cylinder petrol
engine. The fuel economy of the car was expected to be around 21 kilometers per liter under city
driving conditions.

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The Nano Project

The project to build the Nano started in 2003. Girish Wagh was selected as the leader of the 500-
member team which was chosen to develop the Nano. Right from the beginning, the team
members were asked to be as frugal as possible to maintain the low price target of the car.

1. Feasibility Study and Project Planning

• Safety standard (properly designed and built car)
• Power
• Affordability
• STP (Segmentation Targeting positioning)
• SEZ
•
The Tata Nano is a proposed city car debuted by India's Tata Motors at the 9th annual Auto Expo
on January 10, 2008 at Pragati Maidan in New Delhi, India. Called the people’s car in Tata's
promotional material, it was projected to be the least expensive production car in the world. The
standard version of the Nano is projected to sell for Rs. 100,000 (approximately US $2500, GBP
1277, or € 1700), not including fees or delivery. The car was designed at Italy's Institute of
Development in Automotive Engineering, with Ratan Tata ordering certain changes during the
process, such as reducing the number of windscreen wipers from two to one. The Nano’s design
and technical specifications had been among the best kept industrial secrets of recent times.
The mono-volume Nano body is made of light-weight sheet metal and, while 8 per cent smaller
than the Maruti-Suzuki 800 (M-800), has 21 per cent more internal space, mostly due to the egg-
shaped body with greater height.
The wheels are placed at the very corners enabling a shorter length. The engine is under the rear
seat and a small boot in front houses the spare tyre, windshield cleaning water and space for one
bag. The basic version is really basic with no air-conditioning, power steering and central
locking. Some of these, and a diesel version, would be offered in deluxe versions with price-tag
up to Rs 1.80 lakh. The Nano has an uncommon 2-cylinder 4-stroke all aluminum engine made
by Bosch (which won the contract in preference to Siemens) with just 623 cc capacity but
manages to produce a good 33 horse power (comparing well with 37 bhp in the M-800). The rear
engine and drive reduce the transmission load and cost. The car is said to be capable of a
maximum speed of 105 kmph but speeds are best kept less than 60kmph after which the wheel
bearings are likely to wear rapidly. Safety features include crumple zones (where the body itself
absorbs the shock of collisions, leaving the passengers relatively safe), intrusion-resistant doors
and impact A-beams. The company claims the Nano would give 22km/litre in the city and 26
km/litre on the highway, and fuel-efficiency has been touted as a major plus. Yet, since the car
weighs less than 500kg, this is one area where keeping costs low has impacted on performance.
While the Nano does have multi-point fuel injection and an electronic engine management
system, in the effort to extract more power from such a small engine without more sophisticated
and costly control systems, fuel efficiency is lower than what could have been achieved. Exhaust
emissions are said to conform to Bharat State III norms and can be improved to Euro IV
standards. With the present safety, fuel efficiency and emissions standards, the basic Nano would
not be able to enter European or US markets. But, if additional air-bags, side-impact beams,

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catalytic convertors and better fuel efficiency require another $1000, at $3500 the Nano would
still be far cheaper than any compact there.

Segmentation, Targeting, Positioning

 Segmentation :Variable Used

 Geographic: rural and urban
 Demographic: family size & income.
 Behavioral: benefit & user status.
 Target Market: Executive two wheeler segment, second hand car user, auto rickshaw
market, middle and lower income group people.
 Positioning: TATA intending to place in the mind of the
consumers as a people’s car.
 Strategic options: Undifferentiated marketing.

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2. Organization of Project Team:

3. Networking and project Scheduling:

• Carry out Market Research 81 days
• Select Site + Lease it 26 days
• Prepare Plan 31 days
• Estimate cost 36 days
• Application Submission 07days
• Application Approval/Disapproval 16 days
• Notification 10 days
• Prototyping 363 days
• Design Standards 153 days
• Obtain Permit 22 days
• Issue Tender for raw material 07 days
• Procedure material 61 days
• Prepare Site 20 days
• Construction Foundation 25 days
• Construction Plant 130 days
• Start up 12days
• Commissioning 11 days
• Testing 41 days
• First Appearance 07 days

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Activity Task:

GANTT chart:

4. Arrangement of project finance:

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Tata Motors will start taking deposits for the Nano, the world’s cheapest car, next month after a
failed effort to build a new factory for the vehicle delayed production. Pushed into its first loss in
seven years last quarter, Tata Motors can produce up to 60,000 Nano’s a year compared with its
plan to have an initial factory capacity of 250,000.

5. Tendering, bidding and contracting:

Key component suppliers of Nano are set to reap the benefits of their low-cost technologies that
made the world’s cheapest car a reality, with global biggies such as Nissan-Renault , Toyota,
VW and Honda approaching them for parts for their low-cost cars.

Project Environment and Development Cycle

• Car was designed at Italy's Institute of Development in Automotive Engineering.
• Stages in designing the car :
– Benchmarking of existing products and trend analysis
– Setting targets
– Finalization of styling and packaging
– Detailed design of engine,
– Transmission, body, trims and fitments, and other aggregates
– Involving vendors for respective systems and components
– Manufacture of prototypes
– Testing of prototypes
– Finalization of the design.
• 80 percent of the car’s equipments were outsourced from more than 100 vendors.
• Some of the vendors are from the Tata Group like TACO IPD, Tata Toyo Radiators, Tata
Johnson Controls, Tata Visteon, Tata Yazaki, Tata Ficosa etc.
• Other vendors include Bosch, Dephi, Caparo, Continental AG, Denso, FAG, Saint-
Gobain, Mahle, HIS Auto, TRW, GKN, Ficosa, and Visteon.
• The car was assembled by trained mechanics with the outsourced parts.

6. Project Quality Management:

• Project quality is an integral part of the manufacturing and designing phase
• Some examples of Quality management related to Tata Nano project are:
Eco-friendly variants and initiatives
Electric drive train or electric-version
• In broader sense quality management has to be done in the following areas:
– Technical specifications
– Design parameters
– Safety norms
– Marketing strategies
– Pricing
– CRM (Customer relationship management)

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7. Project Safety Management:

• Safety as per car’s specification
– Tata Nano contains an airbag system in its electric version
– Nano has an all sheet-metal body, with safety features such as crumple zones,
intrusion-resistant doors, seat-belts, strong seats and anchorages and tubeless tires
• Safety as per car production
– Helmets, Gloves, Goggles for the workers
– Electrical Safety measures
– Fire safety measures
– Distance between the machinery

8. Project Monitoring and Controlling Mechanism:

• As far as Tata Nano is concerned following are the fields in which monitoring and
controlling is necessary.
– Market Research
– Site selection
– Designing Standard
– Control the price of raw material
– Manufacturing

Validation and Testing

• Nano complies with Bharat Stage-III and Euro-IV emission standards.

• The car has passed the full-frontal crash and the side impact crash.
• Tata Nano passed the required 'homologation’ tests with Pune-based Automotive
Research Association of India (ARAI).
• Tata Nano managed to score around 24 km per litre during its ‘homologation’ tests with
ARAI.

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9. Project Resource Management:

• More than 100 vendors are contributing to the Nano.

Site Administration / Implementation / Maintenance

• After pullout from Singur, Tata decided to set up the plant in Sanand, Gujarat.
• Sanand has other advantages - cities like Rajkot (near to Sanand) where 30% of Nano's
components are manufactured.
• Nano has satellite plant at Pant Nagar where assembly lines of Ace Truck have been
modified to produce Nano’s.

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10. Application of information and technology:

Tata Motors deserves credit for substantial technological innovation, done mostly in-house, a
fact praised even by Indian industry rivals. There are no dramatic new inventions, but there are
numerous small yet significant engineering improvements, in the way things are done, both in
design and manufacture. Reminiscent of one of the great small cars, the British Motors’ Mini of
the ‘60s with its engine across rather than along the length and its re-engineered layout, the Nano
has taken compactness and cost reduction to another level. Tata Motors itself has filed over 40
patents, 34 of them in the power train alone. A few dozen partners manufacturing different
important components, such as the engine block, steering column, drives, electrical etc, have also
made substantive innovations in order to meet technical and cost specifications for the Nano. All
apparently worked with the same brief of cost cutting. This happened not by going cheap but
through better design, making things smaller and lighter and, where possible, using different
materials.

11. Project Close Out:

The project to create the world's cheapest production car began in 2003. The project was first
presented by India's Tata Motors at the 9th annual Auto Expo on January 10, 2008, at Pragati
Maidan in New Delhi, India.

Tata had pulled out of its Singur plant, in which it had invested Rs 1500 crore, in October 2008.
Tata had decided to pull out of the Singur plant, in West Bengal, because of the opposition by
Trinamool Congress against the production of the Tata Nano in Singur.

After exploring the the possibility of setting up the plant in Maharashtra, Uttarakhand, Karnataka
and Andhra Pradesh, Tata Motors chose Gujarat, where they were given 1100 acres of land in
Sanand, by the Gujarat government. The car was set to roll out in the year 2009. The first Tata
Nano manufactured at the Tata’s Rs 2000 crore-Sanand plant, near Ahmedabad, will be rolled
out by end 2010. Tata Motors is using multiple vendors to have the Sanand plant up and running
as soon as possible.

The Tata Nano was commercially launched on March 23, 2009. Initially, after the launch, Tata
Nano will register bookings of one lakh Tata Nanos till the Sanand plant is ready.Till then, the
Tata Nano will be manufactured Tata’s Pantnagar plant in Uttarakhand, and its manufacturing
facility in Pune. The Tata Nano plant in Sanand is expected to roll out 5,00,000 cars compared to
3,00,000 cars from Singur.

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