Tata Nano was developed as an affordable, safe, all-weather 4-wheeled vehicle for families in India. It was designed to cost around Rs. 1 lakh, meet safety and emission standards, and be more fuel efficient than a 2-wheeler. Extensive market research and testing was conducted over 4 years to develop the prototype. The production facility was located in Gujarat with extensive supplier collaboration. The Nano launched with an annual production target of 500,000 vehicles by providing the emotional appeal of car ownership at an affordable price point.

1. NEW PRODUCT DEVELOPMENT LIFE CYCLE OF TATA NANO -Mr. Sandip Kadam MMS Operations(87) R.I.M.S.R

2. What is the Product? DIMENSIONS Overall Length:3099 mm Overall Width: 1495 mm (& 1620 mm with ORVM) Overall Height: 1652 mm Wheelbase: 2230 mm Ground clearance :180 mm Min. Turning Circle Radius: 4 m Seating Capacity: 4 persons Fuel Tank Capacity: 15 Liters Kerb Weight Nano 600 kg Nano CX 615 kg Nano LX 635 kg Payload 300 kg ENGINE & TRANSMISSION Engine Type: 624 cc, 2 cylinder, MPFI Maximum Engine Output: 35 PS @ 5250 rpm Maximum Torque 48 NM @ 3000 +/-500 rpm Maximum Speed: 105 kmph Gradeability 30% Transmission: Synchromesh on all forward gears, sliding mesh on reverse gear with overdrive on 4th gear No. of Gears: 4 Forward + 1 Reverse

5. TATA NANO “I observed families riding on two-wheelers –the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby . This could be very dangerous in night travel or in stormy weather.” [Problem] “It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family”[Dream] “Tata Motors’ engineers and designers gave their all for about four years to realize this goal. Today, we indeed have a People’s Car, which is affordable and yet built to meet safety requirements and emission norms, to be fuel efficient and low on emissions”[Criteria] “We are happy to present the People’s Car to India and we hope it brings the joy, pride and utility of owning a car to many families who need personal mobility.”[Success]

6. Idea Generation To create safe, affordable, all weather form of transport for a family To create an option for people who want to move from 2 wheeler to 4 wheeler in affordable price (As little as 2 Wheelers)

9. So What Type of New Product To Be Developed? Car to cost Rs. 1 lakh on road Car to be built on different platform than conventional ones It must meet all the safety and regulatory requirements It has to be built on a scale which is double than the earlier launches A Truly People’s car: Low cost, Safe, Fuel Efficient

10. Business Analysis Cost: What makes the Nano so cheap?

11. Important Decisions Establish a factory in a tax free zone Get the tax advantage on infrastructure development Get the suppliers to establish base near the factory Get special concessions from state govt. In short select a Manufacturing location where all the advantages could be achieved

12. DEAL OF TATA NANO (@Gujarat) A loan of Rs. 9750 Crore at 0.1% simple rate of interest Repayment of this loan @ 0.1% over 20years. They got 100% exemption on electricity duty The 1100CroresLand has been given with high subsidies without any stamp duty registration and transfer charges The payment for land would be made in eight equal annual instalment at a compound interest of 8% p.a.

13. Total Sales Estimation Demand for people’s car shall be at least twice that of demand for Maruti 800 Initial projections were 500000 cars per year Assumption: 10% of 9 million 2 wheeler market transit to 4 wheelers and that will explode the demand

14. Product Design & Development Design Inputs from Institute of Development in Automotive Engineering, Italy Constant Design changes Design adaptations from Daewoo Matiz and Tata Indica 37 patents associated with the design of Nano Modular Design Revolution: The Nano is constructed of components that can be built and shipped separately to be assembled in a variety of locations

15. Continued… “Gandhian Engineering” Approach i.e. More from less for more and more people Much spacious than Maruti 800 (20 % more) Use of Aluminum Engine to reduce weight and cost Use of light weight steel wherever possible

16. Prototype Development First Prototype: Vehicle which had bars instead of doors and plastic flaps to keep out the monsoon rains. It was closer to a “Quadricycle” than a car, and the first prototype Engine Issue: 540 CC engine when fitted on the prototype, lacked the necessary power. So its capacity was increased by 9%, then by another 9%, finally settled to a 623 CC engine Foot pedal had to be realigned to create more legroom The body had to be changed because Ratan Tata, over six feet tall himself, wanted it to be easy for tall people to get in and out of the car "Imagine the pain of the body designer -- he went through hundreds of iterations, then at the last minute the car length was increased by 100 millimeters!"

17. Testing Crash testing

18. Testing On Torture Tracks

19. Testing On Torture Tracks

21. Production Manufacturing facility located at Sanand, Gujarat 725 acres (for TATA) + 375 acres vendor’s park At the vendors park 41 vendors allocated plots About 80% of the value of components to be sourced from the park Began with a capacity of 2.5 lakhscars/annum (Expandable up to 3.5 lakhs cars/annum)

22. Continued… Resource estimation Engineering operations planning Department scheduling Supplier collaboration Logistics plan Program review and monitoring Contingencies

23. Commercialization Launch the product Produce and place advertisements and other promotions Fill the distribution pipeline with product

24. Marketing of Tata Nano

25. “The TATA NANO innovation was not just in technology ;It was in mindset change.”Thank you