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Source: http://www.businessworld.in/content/view/3419/3517
The Making of a Modern Classic
When Tata engineers began making the Nano, it was seen as an act of faith; what they have
accomplished is an act of courage
Dinesh Narayanan
18 Jan 2008

In early 2003, five engineers from Tata Motors trooped

into the main conference room at Bombay House, the
Victorian sandstone building that houses the
headquarters of the Tata Group. They had been
summoned at a day’s notice from the Tata Motors
factory in Pune by company Chairman Ratan N. Tata,
who had just made a promise the world said would be
‘impossible’ to keep.
Tata had told a Financial Times correspondent on the
sidelines of the Geneva Auto Show that he was thinking
of making a car that would cost about € 2,000. Adjusted
against the then exchange rate of the rupee, that
translated to Rs 1 lakh. Tata says he had never really
defined the project in his head exclusively by its pricing.
“It was the media that said it,” says Tata. “But we
decided to accept the challenge….” With that resolution,
Tata imprisoned himself and his engineers in a promise
to fulfil which they would have to all but rewrite the
principles of automotive engineering.
CLASSIC CARS DOWN THE YEARS Top to When the engineers walked into the conference room
bottom: Ford Model T — 1908 Volkswagen Beetle
that morning, they knew that the meeting had something
— 1938 Morris Mini Classic — 1958 Swatch-
Mercedes Smart — 1998 Tata Nano — 2008
to do with Tata’s statement about a small car that they
vaguely remembered reading about in newspapers a few
days ago. Little did they realise then that the next four years of their lives would be dotted
with moments of agonising failure and heady success, between which they would eat, drink
and catch up with their families. The worst: the engineers would not be able to share with
anyone, even their wives, what was going on inside their second home, the drab block of
concrete called Engineering Research Centre (ERC) at Tata Motors’ campus on the outskirts
of Pune.
Jai Bolar, senior manager for development at Tata Motors’ ERC, recalls that the team
entered the conference room armed with just a 60-slide presentation on all the low-cost
modes of personal transport. The vehicles included motorbikes, autorickshaws, scooters
and the company’s own Indica. “We had no clue as to what we were supposed to do,’’
say Bolar. “So finally, we asked him whether he could tell us what he had in mind.”

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The next few minutes will, forever, be imprinted on the team’s mind. Tata, or RNT as he is
affectionately called, held forth, exhorting the team to dream of building a low-cost car that
would cost only marginally more than a two-wheeler and revolutionize personal transport in
India. Show the world what Indian engineering is truly capable of, RNT told the engineers.
“Make me also part of the team. Only in a country like India or Pakistan can a low-cost car be
made,’’ he insisted.
The motivational talk worked. “We came back from the meeting all charged up,’’ says
Nagabhushan R. Gubbi, head of engineering for passenger cars. Gubbi did not know,
nor did the others, that they had just been impelled by arguably India’s most visionary
businessman to create history.

Spluttering Start
The team made little progress over the next year and a
half. It tried to source parts from around the world, even
toyed with the idea of an open car with plastic or canvas
sheets for protection (see sketch below). The problem
was it was still thinking of making the motorcyclist
safer. Two-wheelers continued to overtake the image of
a car in their minds.
“The biggest challenge when the project started was
INSPIRED LEADERS: RNT with (right) there was no brief, no benchmarks, and it had never
Tata Motors Managing Director Ravi been done before,’’ says Bolar. Even RNT had only
Kant
the disturbing image of a family of four riding a scooter
(Tribhuwan Sharma)
on wet roads and an unclear dream to help such families
as benchmarks.
In August 2005, Girish Wagh, an easy-going, but intense 35-year-old with a reputation for
building teams and trucks, entered the scene. Wagh, a mechanical engineer by training, had
just helped build the runaway hit Ace. He arrived at a time when the first ‘mule’ was ready. A
mule in auto parlance is a vehicle that comprises the engine and transmission, driving a mock-
up addled with electronic sensors. It moves like a vehicle just for testing purposes. The first
mule had a marine engine that delivered 20 brake horse powers (bhp).
“We wanted to see whether such an engine would work,’’ says engine man Narendra
Kumar Jain. It did not.
Cranking Up
At Tata Motors, Jain is regarded as a pioneer. He is credited with the first gasoline engine that
Tatas made. For two years, Jain scoured the world looking for an engine that could fit a small
car. He even tried motorcycle engines, but finally decided that RNT’s common man would
need an engine not yet invented. Jain then went to work with a clean sheet of paper.

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He started off designing a small engine that would

deliver 20 bhp, but realised midway that it would
not be enough. So he increased the engine’s capacity
to 554 cc, which delivered 27 bhp. The engine still
did not have enough zing and its driveability was
not satisfactory. So, Jain redesigned the engine and
increased its capacity to 586 cc. That appeared to be
peppy enough and satisfy all parameters. The team,
swelling in number as new tasks were incorporated
and specialists taken on, was working to meet three
THE IDEA STAGE: (Left) An early parameters — acceptable cost, acceptable
vehicle layout for the occupants, and performance and regulatory compliance, not only
(right) the sideview rendering of Nano current but also future.
during its design phase While Tata engineers worked on the engineering of
the car, Italian design house I.D.E.A., which also
designed the Indica, was chartered with styling. Guided by RNT, the styling kept changing.
Though in an interview with BW, RNT underplayed his own role in the design, Wagh says he
was intimately involved in the styling and made some alterations even a few days before the
launch. “Mr Tata was present at every testing and he made all the decisions,” Wagh
says. “He was very focused on what the customer
would like’’.
In December 2005, the second mule was tested, and
by mid-2006, the first prototype or alpha was ready.
After testing the prototype, which ran on the 586-cc
engine, the team found the vehicle wanting. “We
felt it needed to be longer,” Wagh says. “RNT
wanted changes in styling, which meant changes
in body design, which increased safety performance.” It was decided to increase the
length by 100 mm. It meant redoing everything that was done until then. The team was
back at the drawing board.
Beat but Not Beaten
That the project did not have any specifications, and was never tried before, worked both in
its favour as well as against. With only three parameters to guide them, the engineers kept
coming up against failures. Jain says the biggest support from the management was not to
hold a failure against anyone. “The hardest part was continuing to believe we could do it,’’
RNT said. “I never felt the project won’t go through. I was scared I won’t meet targets —
price targets, time targets, the auto expo…’’
Bolar says that since there was no precedent to the project, everybody had a number of
concepts. “The management remained open, but the most challenging task was to define
the specs,” he says. The Maruti 800 was the only benchmark to go by. And it cost more
than Rs 2 lakh on the road.

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As the team struggled with constant change, which often put them at their wits’ end, RNT and
Tata Motors Managing Director Ravi Kant played a key role in preventing creative
fatigue. “We were like a football team,” says Gubbi. “The leadership was where the ball
was. Everyone was playing for everyone.”
Nano’s Vital Statistics
624 cc, 34 bhp, rear-mounted
Four-door monocoque
Efficiency 20 kpl
Top speed 105 kmph
Gearbox Four-speed manual
Length 8 per cent smaller than Maruti 800
Inner space 21 per cent larger than
Maruti 800
Safety Survived frontal crash
at 48 kmph
Emission Bharat III and Euro IV
compliant
Ravi Kant put in long hours of work and was always available to take decisions, monitor
progress and keep the team motivated. “We exposed our people to products of competitors
by tearing those products apart and analyzing the good and bad and comparing them
with our own, thereby making people see why customers buy someone else’s products
rather than ours,’’ Ravi Kant told The McKinsey Quarterly in a recent interview.
Abhay M. Deshpande, general manager for vehicle integration, says though there was
time and cost pressures, the collective leadership kept the engineers completely insulated
from them.
Sometimes the work was repetitive and tedious. In designing the engine, Jain did 150
thermodynamic simulations, each of them stretching eight to ten hours. Body systems expert
R.G. Rajhans, who had built the body of the Indica and also the new Indica, had by then built
about 10 different floors for the car.
Finally, in October 2006, Jain hit upon an optimal engine design. His creation had a capacity
of 624 cc and squeezed out 34 bhp of power. “It was the first time that a high-pressure die-
cast engine was made in India,’’ says Jain. In comparison, the first Maruti 800, which
was powered by a 796-cc engine, delivered only 37 bhp.
Jain’s computer prototype was cast into a real engine in January 2007, when it was first fired.
With a multi-point fuel injection system developed by Bosch calibrating the gasoline flow, the
heart of the car was ready. Jain filed 10 patents for the engine. By the time the car was
finished, the company had filed 34 patents in all; and some more are in the pipeline.

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YOUTH POWER: The average age of the 500-member team that delivered
the Nano is a mere 30 (Subhabrata Das)

Miles To Go...
E. Balasubramoniam, head of sourcing for the project, was not a popular man with
vendors. “We had several heated arguments,’’ says Balasubramoniam, a former Maruti
hand with a wry smile and a negotiator’s demeanour that doesn’t give away anything.
His job involved constantly hand-holding vendors as well as haggling with them on cost
reduction and engineering changes. “We really gave them a hard time. But to their
credit, they stuck on and delivered.’’
To achieve its ambitious cost reductions, Tata Motors had to get vendors to pare margins and
persuade them to produce components at lower costs. The vendors had to invest in new
processes and methods to reengineer their products to specifications that were rigidly guided
by cost, performance and regulatory compliance. Many of them would not make profits for
years. For example, P.K. Kataky, director of battery maker Exide, was reported as saying that
the company’s margins would be thin and it would start making money only after two or three
years.
Balasubramoniam says getting suppliers, who were mostly clustered in auto centres such as
Pune, Chennai and Delhi, to invest in Singur, West Bengal, which Tata Motors had chosen for
its small car plant, was difficult. “But now about 15-20 vendors would finish their plants
along with ours (Tata Motors’),’’ he says.
Singur itself was a dark chapter in the project’s progress. People from several quarters decried
how West Bengal gave Tata Motors subsidised land. In the wake of the violence in

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Nandigram, West Bengal’s main opposition party, the Trinamool Congress, also criticised the
ruling Communist Party for acquiring land from peasants on behalf of a private company.
RNT himself was uncharacteristically aggressive in saying that vested interests looking to
scuttle or at least delay the project were behind the problems at Singur and vowed to show
them up “at the right time’’.
For a while, the tension over Singur made life so difficult for the project that at the Nano’s
launch RNT joked that the car could have been called “Despite Mamata”, after the Trinamool
Congress’s leader, Mamata Banerjee.
While political gamesmanship fuelled the fires in Singur, the engineers at Pune were battling
to bring costs to nano levels. Young blood can bring innovative ideas, but there are some
things that only experience can teach. That came from experts such as the ebullient
Nagabhushan, who had decades of experience building commercial vehicles, and K.K.
Mirasdar, the deputy general manager of prototypes and manufacturing, a veteran with a raspy
voice. The group held workshops where experts from the commercial vehicles arm found
ways to lay alternative fuel lines, make better use of plastics and build better lamps.
Since the project was inspired by two-wheelers, people who had worked in the two-wheeler
industry were roped in, especially in sourcing. Rakesh Mital, who came from Yamaha, came
up with the idea of using instrument panels similar to those in motorcycles. The panel in
Nano’s dashboard was inspired by the minimalism of the clusters on the heads of
motorcycles. Ideas for suspension, cables and lamps were inspired by scooters and
motorcycles. The tall-design car has McPherson struts stabilising the front and uses a
suspension similar to that of motorcycles at the back to balance for a higher centre of gravity
and a rear-mounted engine.
An Idea Is an Idea
Often ideas came from unexpected sources. The team was struggling to reduce the cost of
seats while complying with safety norms when RNT, a passionate pilot, who often shuttles
between Mumbai and Pune by a chopper, had a brainwave. He thought the reclining and
sliding mechanism of helicopter seats could hold a solution for the Nano. The engineers at
Tata Johnson studied the mechanism and designed one for the car. The window winding
mechanism of the car was also inspired by helicopter windows and done by IFB and Shivani.
The manufacturing team also introduced pokayoke, a Japanese term for mistake-proofing.
Mirasdar, who made the prototypes, almost always had a suggestion that would end up
reducing costs and simplifying processes.
Sometimes the cost reduction was so drastic that it surprised the engineers themselves.
“We found that the door handle of the car had 70 per cent less parts than one of the
cheapest European cars,’’ says Mital.
After the engine design was frozen, things began to fall in place. The dimensions had been
fixed and the layout of the transmission finalised. Sona Koyo and Rane Group came up with
hollow steering shafts, saving cost and cutting weight. Sharda Motors and Emcon designed
the exhaust system and MRF tweaked the tyres to bear extra weight on rear wheels.

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“At every stage, we tried to cut costs by reducing the number of parts that went into each
component,’’ says Wagh. As the team succeeded at this, they began to see the “impossible”
dream morph into reality. But outside the factory,
scepticism and discontent were growing.

Revving Up
As the car got closer to completion, the media, including
BW (see ‘Tata’s Small Car, 1 Lakh Unanswered Questions’,
BW, 6 August 2007), started speculating. Many reports
were cynical; some were guarded, as if leaving room just in
case they were proved wrong. Environmentalists such as
R.K. Pachauri of The Energy Research Institute and Sunita
Narain of Centre for Science and Environment began raising
concerns about how a million small cars would impact
urban congestion and air quality. But Tata was privy to GIRISH WAGH Head, small
information that his car had survived a frontal crash test and car project, Tata Motors
met Euro IV emission norms several months ago. “At every stage, we tried to cut
costs by reducing the number
Japanese auto giant Suzuki, which makes the ubiquitous
of parts that went into each
Maruti 800, also spoke out with derision. “What is it
component’’
going to be? A three-wheeler with a stepney?’’ Suzuki’s
(Subhabrata Das)
Founder Chairman Osamu Suzuki had quipped when
Tata announced the project. In February 2006, Suzuki
again took a shot, saying that it was impossible to make a reliable car for Rs 1 lakh.
But within a year of Suzuki’s comment, the Tata team had reason to pop the bubbly. A beta
prototype was ready by the middle of 2007 and to maintain secrecy, it was tested at foreign
locations, such as test tracks in Germany and the rough terrains of Australia.
Just about 10 days before the Auto Expo at New Delhi’s Pragati Maidan where the car was to
be unveiled, RNT joined the team in Pune. He camped there until the launch, overseeing the
finishing touches. He personally drove it, and made several last-minute changes, including
changes in the seat covers and air vents, as the team prepared for the big day.
While the media wildly speculated about the look and features of the car, even carrying all
kinds of sketches about the car’s looks, three Nanos were shipped to Delhi in containers and
remained under cover until the night before the launch. In the wee hours of 10 January, the car
was rolled into Tata’s pavilion in hall 11 of Pragati Maidan right under the noses of several
TV vans stationed nearby. But they missed the action. RNT, who later admitted he had spent
a sleepless night preparing for the launch, and Ravi Kant, were present when the cars arrived.
That day will go down as a red-letter day in Indian automotive history. Using a three
dimensional hologram created in Germany, a ‘virtual’ RNT spoke to the huge crowds
deluging the Tata pavilion about the car he had dreamed of and which was finally about to be
unveiled.
Then, the real RNT, his over 6’ 2” frame comfortably ensconced in a white-coloured Nano’s
driver seat, drove onto the stage what the world now acknowledges as a path-breaking car. As
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the crowd roared and cheered, a visibly tired but moved RNT took the mike to assure them of
one thing — the car, despite the protestations of many in the press, would cost Rs 1 lakh. “A
promise is a promise,” RNT said, sealing his place in the hearts of millions, whose aspirations
of owning a car were now reality. As Tata stood modestly enjoying his success on the stage, a
foreign journalist was overheard saying to another: “We are lucky to be here’’. The other
replied, “Yes, at least we can tell our grandchildren that we were there.’’
If the Nano was one of the most anticipated events in automotive history, its launch has set
the industry aflutter. “It’s a problem for Detroit,’’ wrote The Washington Post, “which is
racing to enter India’s booming small-car market but will now have to completely
revolutionise its production and distribution to compete.’’ Perhaps the most important
comment came from Ford’s Executive Vice-President John Parker. “It is a groundbreaking
product,’’ he said. “The Nano will cause people to think differently about the car. I have a lot
of respect for Tata.’’ It seemed like poetic justice that the praise came from the company that
had revolutionised personal transportation with the launch of the original ‘people’s car’, the
Model ‘T’, exactly a hundred years ago. Curiously, every ‘people’s car’ has been launched in
the eighth year of the decade (as noted on page 36).
However, Tata Motors still needs to align the commercial imperatives behind the car, analysts
say. The company has invested Rs 1,700 crore in creating the Nano, which will yield wafer-
thin margins. Analysts are concerned the company will have a hard time achieving the
volumes before the Nano returns a profit. In fact, Tata Motors’ stock has been downgraded by
rating agencies on this count as well as concerns over RNT’s bid to acquire the Jaguar and
Land Rover for $2 billion. Analysts also seem unsure if a company can straddle a spectrum of
products that ranges from a $1-lakh car to a Rs 1-lakh car. “That car doesn’t have
airconditioning, power steering, air bags and other features. Do you dare to buy that kind of
car?’’ Wang Chuanfu, chairman of Chinese carmaker BYD, was quoted as saying at the
Detroit Auto Show.
But RNT emphasises that the Nano is not just a Rs 1-lakh car, but a platform that will be used
to create further high-end models that will sell for more and yield comfortable margins. Tata
Motors will also foray into electric and hybrid cars, using the Nano and its future variants as a
base, RNT says. He adds that he has also received invitations from at least two countries to
set up Nano manufacturing plants there, which will also help recover the car’s R&D costs.
More impressive are the intangible benefits RNT’s dream car has achieved for Tata Motors.
For one, he has put the fear of Indian engineering into carmakers across the world. In a single
stroke he has also made the Tata brand known in every corner of the world, something no
other auto company has ever done. In fact, the publicity the Nano has garnered globally would
be worth more than Rs 500 crore.
The Last Mile
The launch was perfect, but the Nano has to go some more distance before it reaches the
customers. The last stage of cost reduction is expected to happen in distribution. Tata Motors
is developing an assembly kit for distributors who would stock completely knocked-down kits
of the car at warehouses and assemble them on site. Carting CKDs to different parts of the
country is expected to bring down costs as more parts can be transported in the same space
that a fully built car can be moved.
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To enable cheaper assembly at the distributor’s end, some parts of the car would be glued
together instead of welded. “Usually those who make a small number of cars do such
distributed manufacturing,” says Wagh. “Sometimes others do it to test the market. For
the first time, it would be tried on a large scale.’’ Also, the car is still at the beta stage.
Wagh says there would be more tweaking done by the time the first car rolls out of
Singur later this year.
Already newly converted cynics are describing the car as revolutionary. The only person
not fully satisfied is RNT himself. “It is not as revolutionary as I wanted,'' he said. “I
wanted the car to be made from new materials, use new techniques, in a sense
completely re-envisage the way cars are made. In that sense I am still not satisfied,'' he
told BW.
For the moment, however, the cute-as-a-bug Nano is the cynosure of all eyes. And Ratan Tata
has undoubtedly entered the hall of fame of automobile manufacturing.

SECRET UNVEILED: Three Nanos were shipped to Delhi in utmost secrecy

in containers and remained under cover until the night before the launch at
the Auto Expo (Tribhuwan Sharma)

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