Indian automaker Tata Motors announced the commercial launch of its teeny four-door Nano – priced at Rs 1 lakh, or $1,985. That makes it the cheapest car in the world and a headline grabber. But there is more to the story.
The Nano gets nearly 52 miles per gallon in the city and over 61 mpg on the highway, making it the most fuel-efficient car in India.
That means Tata has done what no major Detroit automaker has dared to do: brought a compact, ultra-cheap, highly fuel-efficient car to market.
To put this another way: That yellow bubble car you see above could end up being one of the most important automobiles of the 21st century.
How did Tata do it?
Engineers redesigned every component to make a rear-engine car that is small, light and cheap. Some of the auto's exterior is glued together, not welded. There is no power steering. No radio. No airbag. No A/C on the basic model. Windows wind down by hand. There is one windshield wiper, not two.
The car – three meters long, 1.5 m wide, and 1.5 m high – was designed at Italy's Institute of Development in Automotive Engineering. Thirty-four patents were filed in relation to its design, none of which is considered earth shaking or revolutionary.
The Nano was conceived as a simple microcar for a new segment of Indian consumer, one who never owned a vehicle. It is the ultimate "People's Car," as Tata calls it. But don't be fooled by its lack of amenities, says Vardhan Kondvikar of the BBC's Top Gear magazine, "The Nano's a real car:
By which I mean it looks, feels and drives the way you'd expect any car to. ... It doesn't feel different, or cheap, or bad just because it costs so little – if Tata hadn't committed to a price, they could have charged twice as much and you wouldn't have blinked."
An upgraded version, the Nano Europa, will arrive in Europe in 2011. It will cost less than $5,000 and reach at least 67 mpg. The company announced it "could further develop the European version for the U.S.," and hinted at a potential 2012 launch date.
The rumor mill says that Tata will bring a hybrid version as well – a "Tata Prius" of sorts. An all-electric hatchback, an "E-Nano," is being developed with Norwegian electric car company Miljo Grenland Innovasjon. In September, Tata announced plans to make it available in Norway in 2009 and India in 2010.
Of course, its electric car plans can't erase the fact that Tata's Nano, however fuel efficient, will bring 14 million new drivers to India's roads and a rise in CO2 emissions to a warming planet. It's a valid critique. Yvo de Boer, Executive Secretary of the UN Framework Convention on Climate Change, addressed it well yesterday, via The Economic Times:
"I am not concerned about it (the Tata Nano) because people in India have the same aspirational rights to own cars as people elsewhere in the world," de Boer told the Indo-Asian News Service at a press conference. But he said it was crucial to support the automobile industry so that they produce "the automobiles of tomorrow rather than the automobiles of yesterday."
Ratan Tata, the chairman of Tata Motors, is the visionary executive credited with steering the Nano through to completion, often through high-risk waters. For him, the Nano model -- small, affordable, efficient -- is the car of tomorrow. It "represents the spirit of breaking conventional barriers." The comparison with Henry Ford and his Model-T is irresistible. Via The Times of India:
Ford wanted to make a car for the multitude, not for the elite, with the best material and the best design that the technology of his time could devise, and he wanted to make it, above all, at a price that was affordable. This is the example that Ratan Tata has followed with determination. When he announced the price of his car in an interview to the 'Financial Times' during the Geneva Motor Show, his colleagues were 'aghast', but he had set his goal.
Once production of the Nano stabilizes, Mr. Tata envisions a new kind of distribution chain that would dramatically cut manufacturing costs and create entrepreneurs. The Nano would be sold as knocked-down kits, shipped to Tata-trained independent dealers for assembly and serviced by local entrepreneurs. Mr. Tata explains in an interview with the Times of London:
"A bunch of entrepreneurs could establish an assembly operation and Tata Motors would train their people, would oversee their quality assurance and they would become satellite assembly operations for us. So we would create entrepreneurs across the country that would produce the car. We would produce the mass items and ship it to them as kits.
That is my idea of dispersing wealth. The service person would be like an insurance agent who would be trained, have a cell phone and scooter and would be assigned to a set of customer."
We don't have to remind you of the dismal state of the auto industry. Seriously: Is there a better car than Tata's Nano – or a better carmaker – for this moment in history?