Tata Nano was developed as an affordable car for the Indian market. The development process involved generating ideas, concept testing, business analysis, and addressing challenges. Some key points include: 1) The initial concept was a 3-wheeled vehicle but it evolved into a 4-wheeled car that could carry 1 ton for under $2,000. 2) Extensive cost-cutting measures were employed like removing non-essential features to get the price down. 3) The Nano faced questions around safety and competition from used cars but structural tests showed basic modifications could improve safety.