Case Study - 3

Manufacture of World Cheapest Car: TATA NANO

M/s Tata Motors launched the world cheapest car in March, 2009. The car was developed
totally indigenously by M/s. Tata motors. The organization made all efforts to ensure a
highly efficient design examining each subassembly: Engine, Transmission, Steering and
related components.
The R&D team involved all the departments namely Engineering, Manufacturing,
Quality control, Purchase and external Suppliers & Customers. The margins expected are
low because the car is priced low. The low priced car attracted a large number of Indian
consumers and the initial order booking itself was around 2 lakhs.
M/s. Tata Motors could come out with low priced car by setting up a targeted cost and
innovative design. M/s. Tata was able to bring a car which is fuel efficient, environment
friendly, meeting the safety and environment requirements.
The Tata Nano, developed the peoples car, at the least manufacturing cost in the world. It
is a city car launched by India's Tata Motors at the 9th annual Auto Expo on January 10,
2008 at Pragati Maidan, New Delhi, India. The standard version of the Nano (without air
conditioning, radio or power steering) will cost Rs 100,000 (not including levies such as
VAT/LT, transport and delivery charges). The choice of price has led to the Nano being
called the "one lakh car".
According to Tata Group's Chairman Ratan Tata, the Nano is a 33 PS (33 hp/24 kW) car
with a 623 cc rear engine and rear wheel drive, and has a fuel economy of 4.55 L/100 km
(21.97 km/L) under city road conditions, and 3.85 L/100 km on highways.. It is the first
time a two-cylinder non-opposed petrol engine will be used in a car with a single
balancer shaft. Tata Motors has reportedly filed multiple patents related to the innovations
in the design of Nano, with powertrain design alone having 34 patents. The head of Tata
Motors' Engineering Research Centre, Girish Wagh has been credited with being one of
the brains behind Nano's design.
According to Tata, the Nano complies with Bharat Stage-III and Euro-IV emission
standards.
The Nano has 21% more interior space and an 8% smaller exterior, when compared with
its closest rival, the Maruti 800. The car will come in different variants, including one
standard and two deluxe variants. The deluxe variant will have air conditioning, but no
power steering. The car orginally expected to be produced in the Singur plant in West
Bengal is changed to Sanand, Gujarat.

The use of a rear mounted engine to help maximise interior space makes the Nano similar
to the original Fiat 500, another technically innovative 'people's car'. A concept vehicle
similar in styling to the Nano but with front wheel drive was proposed by the UK Rover
Group in the 1990s to succeed the original Mini but was not put into production.
The order book for Nano is very slow than what is expected.
Sales during last four years are given below.
Year

Number of Cars sold

2009-10

30,000

2010-11

70,000

2011-12

74,000

2012-13

53,000

2013-14 (First half)

10,202 (Total sales during the year: data to be

collected)

Review & Report on the following points:

1. What are the challenges faced by M/s. Tata Motors in respect of product
introduction time, design & engineering, cost and how do you think they were
achieved.
2. Study from the point of view of Concurrent Engineering & Manufacturing and
Cost cutting. Application of QFD at design stage.
3. External factors that helped M/s. Tata motors in bringing out the low priced car.
4. The Maruthi 800 of M/s. Maruthi-Suzuki India Limited Vs. Tata Nano.
5. Future challenges of Tata Nano.