Ratan Tata had an idea, after a personal experience, to produce a car which is cheaper than 1 Lakh. They realized very fast that they can’t build a car by benchmarking against existing cars, so they took only the important systems which are also available in a two-wheel scooter. It was brought down by dispensing with most nonessential features, reducing the amount of steel used in its construction, and relying on low cost Indian labor. The car was an unmitigated success and showed the world that a less expensive automobile was possible.
The differentiation between a radical innovation, which indicates that the product develops a new technology in a new (even not existing before) market and an incremental innovation, which indicates that the Product advances a technology in a given Market, seems like in many similar cases not that clear. Some authors like Reichwald and Piller (Reichwald and Piller, 2006, p. 101) would even emphasize to distinguish into four categories in order to categorize the level of novelty more specific. However, in some sense the Tata Nano can be considered fitting into the first group, because there have been obviously parts of the Tata Nano which were completely new invented and were developed together with the suppliers, like for example the hollow steering column. But one can also argument, it is just an advanced version of a car for which markets and most of the know how to build the main parts in some, not equal but similar notion already existed. Consequently, if focusing on the whole car itself from this point of view, it fits more into the category of an incremental innovation with a lower degree of novelty, because the concept of a car is still the same. Accordingly, when looking at the Tata Nano form this point of view, the component innovation, specifically innovations like for example the hollow steering column, would be more suitable instead of an architectural innovation.