TATA MOTORS HAS UNVEILED THE WORLD'S CHEAPEST MOTOR NANO CAR
The case discusses the making of Tata Nano, the world's cheapest car, manufactured by India based Tata Motors. On March 30, 2009, Tata Nano was launched with an ex-factory price tag of INR 100,000 (about US$ 2000). The case explains the design and development process of TataNano. The car was the result of a five year research and development project carried out by Tata Nano development team. While developing the car, Tata Motors and its suppliers constantly made efforts to reduce the costs while ensuring quality of each and every component including engine, steering, wheels, tires, windshield washing system, gear shifter etc.
THE MAKING OF TATA NANO
INTRODUCTION Tata Nano is a proposed city car — a small, affordable, rear-engined, four-passenger car aimed primarily at the Indian market.
ABOUT PLANT Investment of 1500cr. rupees by Tatas. Shifting cost of the plant from singur is around 500 cr.
Total area of plant is 1000acres out which 300 acres were alloted for assembling of various parts and rest 700 acres for manufacturing.
AIM OF MAKING The project to create the world's cheapest car inspired by the number of Indian families with two-wheeled rather than four-wheeled transport.
TECHNICAL SPECIFICATION AND FEATURES Technical features of tatanano car are: First car in india with rear engine and rear wheel drive. Engine with 623cc A 33bhp car Having fuel efficiency 21.97km/ltr in city and 25.5km/ltr on highway. First car with 2 cylinder non opposed petrol engine. Acceleration: 0-70 km/h in 14 seconds. Maximum speed: 105 km/h. Trunk capacity: 15 L. Front brake: disc Rear brake: drum
Supplier Relation E.Balasubramanian , head of sourcing for the project, was not a popular man with vendors and there were problem in order to get vendors to pare merging and persuade them to produce components at lower cost . The vendors had to invest in new processes and methods to reengineer their products to specifications that were rigidly guided by cost , performance and regulatory compliances. However A three-shift operation and consolidated purchasing with suppliers provided them with lots of relief. STRATEGIES APPLIED Tata divided the components into two types – proprietary designs and Tata Motors design. For proprietary design components Tata went with established suppliers such as Bosch which supplies the engine management system and has significantly contributed to the future diesel engine. For components and systems designed in-house, Tata Motors chose suppliers with strong process capabilities who could give valuable suggestions and improve on the designs. Nearly everything has been sourced locally and the Nano will have 97% local content from day one. Tata’s suppliers were an integral part of not only the design and development process, but also purchasing.
SUPPLIERS TO TATA NANO Bosch 8. Freudenburg Caparo 9. GKN Continental 10. ItwDeltar Delphi 11. INA Denso 12. Johnson Controls Fag 13. Mahle Ficosa 14. Saint gobain and many more
Where Bosch a German based automotive company it supplies gasoline injection system, starter, alternator, brake system. Caparo vehicle technologies : a Europe based company. It supplies inner structural panels. Continental motors: it is a Europe based company. It supplies fuel level sensor, gasoline fuel supply system and etc.
WHY TATA NANO IS SO CHEAP?
The below diagram is self-explanatory, where the following features have been modified to reduce the cost: No air conditioning on standard model Windows wind by hand Manual steering no air bag 624cc two cylinder engine in boot giving max speed of 70km/h Plastic and adhesive replaces welding Bodywork made of sheet-metal and plastic
DISTRIBUTION STRATEGY Tata nano has applied the open distribution innovation which helped the company to reach maximum to the customers. Following are...