Topics: Tata Nano, Cost, Tata Motors Pages: 3 (1183 words) Published: October 13, 2010
Different approach needed for frugal engineering to work
Typically, when a well-established automaker designs and builds an inexpensive car, the company's thinking is biased by decades of practices and procedures, and by its relationships with employees, customers, and suppliers. The approach reuses existing designs and relies on existing components. In essence, these companies start with a more expensive car and focus on ways to make it cheaper. That may count as a form of cost cutting, but it is not frugal engineering. By contrast, when Tata Motors engineers began creating the Nano, they were inspired more by the three-wheeled vehicles known in India as auto-rickshaws than by any existing car models in Tata Motors' lineup. Building up from the bare minimum enabled the engineers to achieve their cost (and price) targets without compromising the essential functions of the car. If instead the Tata Nano had been designed on the platform of the then cheapest Tata car, it would have been twice the price. Consider the conventional approach: Decades' worth of engineering value is built into even the least expensive of today's automobiles. Components, right down to the steel used, have steadily become more sophisticated, and often more expensive. The cost base, the design thinking, the very idea of what makes an automobile - all combine into a set of structural costs that simply go unquestioned. Reversing course is difficult, and few want to try. For example, if you asked Western designers to come up with a low-cost wiper system for cars, it's unlikely they would challenge the fundamental architecture of two wiper blades. But it would be cheaper to place one blade in the center that sweeps from end to end. India's auto-rickshaws have a single blade. Now, so does the Nano. To achieve the drastically lower prices that emerging markets require, companies must be open to rethinking all aspects of the product. The Nano uses not only just one wiper, but also just one...
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