Tata Nano 2


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Tata Nano 2

  1. 1. A case in cost management D.H.Parshuram 13 Akbarally Rahimansa 25 Nishant Hiralal 18 Sunil Punjabi 26
  2. 2. <ul><li>The mission began in 2003.The objective, to build a cheap people’s car. To provide the 2 wheeler rider- a safer, cleaner, all weather and comfortable 4 wheeled driving option. </li></ul><ul><li>The car that was unveiled in Jan 2008 was sleek and stylish, neither inferior in quality nor flimsy and met safety and environmental standards. The world was surprised. </li></ul><ul><li>How did the Tata’s manage? The creation of Nano is one of innovation and ingenuity. </li></ul><ul><li>Here is how a dream was made into reality. </li></ul>
  3. 3. <ul><li>Everyday we invite people to come and examine the two Nano cars kept at our Pune research centre, one a complete prototype and the other a dissected version. </li></ul><ul><li>We ask them, &quot;How can we make more savings?“ </li></ul><ul><li>- Ravi Kant, MD, Tata Motors </li></ul>
  4. 4. <ul><li>Past - Premier and Ambassador </li></ul><ul><li>Present- Almost all global auto companies </li></ul><ul><li>With the launch of Nano the heat is on . </li></ul>Description Maruti 800 Tata Nano Length 3335 mm 3100 mm Breadth 1440 mm 1500 mm Height 1500 mm 1600 mm Wheelbase 2175 mm 2230 mm Engine 796 cc,3 cylinder 624 cc, 2 cylinder Mileage 15 km/hr 20 km/hr (to be substantiated) Weight 650 kg 600 kg
  5. 5. <ul><li>Innovation has been the hallmark in the quest for the Nano. It has focused on creating cost effective solutions. A new brand of innovation that makes more out of less. </li></ul><ul><li>34 patents have been filed. </li></ul><ul><li>Inexpensive solutions availing the existing infrastructure of Tata motors. </li></ul><ul><li>Modular design: Components in kit forms that can be easily shipped, assembled and serviced even by local entrepreneurs. </li></ul><ul><li>Light weight welded steel platform. Minimum use of steel to reduce weight. </li></ul><ul><li>Adoption of rear engine, rear wheel drive. </li></ul><ul><li>Elimination of propeller shaft. </li></ul>
  6. 7. <ul><li>The role of the suppliers are as important as the one played by the ‘Nano team’. </li></ul><ul><li>Initially the suppliers were skeptical. But the Tata’s persisted. </li></ul><ul><li>They went back to the drawing boards and redesigned components specially for the Nano. Rest is history. </li></ul><ul><li>Every partner has a story to tell on their Nano endeavor. </li></ul><ul><li>GKN Driveline spent a year developing 32 variants to create the perfect driveshaft. </li></ul><ul><li>Rane group replaced the steel rod of the steering with a tube– a major cost saver. </li></ul>
  7. 8. <ul><li>Elimination of the unwanted & unnecessary. </li></ul><ul><li>Incorporating only the essential. </li></ul><ul><li>Reduction of technical complexities. </li></ul><ul><li>Only one wiper. </li></ul><ul><li>No left side mirror. </li></ul><ul><li>More plastics especially in the interiors. </li></ul><ul><li>Bulbs that meet regulations than long life . </li></ul>
  8. 10. <ul><li>Mother plant </li></ul><ul><li>Manufacture the complete car. </li></ul><ul><li>Parts supply base, make CKD sets & send to 5 other plants in different parts of India. </li></ul><ul><li>Centralization of purchase . </li></ul><ul><li>97% parts locally sourced. </li></ul><ul><li>Only 20 companies to supply 70% of components. </li></ul><ul><li>Volume commitments. 75% from single source. </li></ul><ul><li>Half the vendors will be located near the mother plant. </li></ul>
  9. 11. <ul><li>Sky is not the LIMIT…… </li></ul><ul><li>To build an economy of scale </li></ul><ul><li>Rock bottom price. </li></ul><ul><li>Sleek and stylish with good looks </li></ul><ul><li>Value for money </li></ul><ul><li>20% more legroom, headroom & sitting capacity than Maruti 800, its nearest competitor. </li></ul><ul><li>Euro III compliant. </li></ul><ul><li>Full wrap frontal collision test as per US & European standards. </li></ul><ul><li>Suspensions and tires of good quality to take on the Indian roads. </li></ul><ul><li>A small trunk for a small car. </li></ul>
  10. 12. <ul><li>Objective : To create a low cost car, complying with regulatory requirements and having enough power to accelerate and run the car. </li></ul><ul><li>The team: An ambitious, talented and go getting team, led by a 32 year old, Girish Wagh. 500 engineers with an average age of 25-30 years. </li></ul><ul><li>A core team of 5 engineers- industrial design, transmission, body, vehicle integration and safety regulation met daily at 3 pm to discuss the latest and chalk out a plan for the short term. </li></ul><ul><li>Many failures, but each time they got going again. </li></ul><ul><li>The goal was clear, do the impossible. </li></ul>
  11. 13. <ul><li>VISION - Break new ground, move away from being mundane and emerge a leader in its area. </li></ul><ul><li>IDENTIFICATION - A car for the burgeoning Indian middle class especially from the 2 wheeler segment which should be affordable. </li></ul><ul><li>MISSION - Gandhian principles of extreme frugality, economy of scale , a will to challenge, working hand in hand with their partners. </li></ul><ul><li>Even as the auto experts & companies doubted the 1 lakh car, the Tata's worked silently and tirelessly having total conviction in their goal. </li></ul>
  12. 14. <ul><li>Tata’s will barely make any profit in the initial stage. A few experts also predict that they will loose money, as a one lakh car is not feasible. </li></ul><ul><li>But what they are heavily banking on are the high volumes, 2.5 lakh in the initial year and scaling it up to 5 lakh. </li></ul><ul><li>A low profit model is not a major concern. The concern is to meet the sales target and economy of scale. </li></ul>
  13. 15. <ul><li>They came, they saw and they _____? </li></ul><ul><li>Is it ‘Conquered’? </li></ul><ul><li>----And there are more questions which need to be answered. </li></ul><ul><li>Is it really a one lakh rupees car ? </li></ul><ul><li>Can they sell it at one lakh rupees & for how long? </li></ul><ul><li>Does the car have technical strength to last on the tough Indian roads? </li></ul><ul><li>One thing is for certain, the Tata's have succeeded in making a low cost car with their ingenuity and innovation. </li></ul><ul><li>As for the other questions only time will tell. </li></ul>
  14. 16. <ul><li>1.Analysis – Tata’s cost reduction techniques in one lakh rupee ‘Nano’ www.techon.nikkeibp.co.jp/english/NEWS_EN/ 20080129/146543 </li></ul><ul><li>2.BI cost – the Tata Nano way, Shailesh Kosambia www.dmreview.com/bnews/10001090-1.html </li></ul><ul><li>3.Lessons to learn from Tata’s Nano, Business Week online -25/3/08 www.search.rediff.com/money/2008/mar/25nano.html </li></ul><ul><li>4.Tata Nano-innovation around cost – Lois www.grabbinglightning.com/tata-nano-innovation-around-cost/ </li></ul><ul><li>5.Tata Nano – the secrets of the $2500 car feb 2008; Nick Kurczewski </li></ul><ul><li>www.autoobserver.com/2008/02/tata-nano-the-secretsof-the-2500-car.html </li></ul><ul><li>6. The story behind Tata Nano; Manjeet Kriplani, Business Week online </li></ul><ul><li>www.rediff.com/money/2008/may/14tata.html </li></ul><ul><li>7. Not so nano - the tata nano (the 1-lakh car) </li></ul><ul><li>www.carwale.com/research/preview/tatanano/?_kk=nano%20car&_kt=194ca159-4e4d-4b51-a8b3-873fbe37697&gclid=cmtnjusel5ycfqe_egod6uvs6a </li></ul><ul><li>8. Europeans win big with Tata Nano, Automotive news Europe, 15/3/08 </li></ul><ul><li>www.tatanano.inservices.tatamotors.com/tatamotors/index.php?option=com_content&task=view&id235&itemid=208 </li></ul><ul><li>9.www.tatanano.com </li></ul>
  15. 17. THANK YOU