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Ratan Tata reveals his thoughts behind the Nano, and his vision
Times of India, India Saturday, January 12, 2008

Competitors scoffed. They said it couldn't be done, it would take a miracle to make it happen. Ratan Tata of the Tata Group, in a freewheeling conversation with TOI, on the eve of the launch of Nano. Tata looks back on the four-year journey that led up to the most eagerly awaited launch in the history of India's automobile industry — and discusses his vision for the group, why this would be an ideal time to retire, his search for a successor, rivalries that may have stymied Tata projects and how the Jaguar deal fits into his gameplan... Interviewed by T Surendar & J Bose of Times of India.

I'm in a lonely phase of my life: Ratan Tata

Q: Are you feeling more apprehensive now than you felt at the launch of the Indica?

A: Not really. At that time, we did not know if the market, which knew us as a truck manufacturer, would accept us as a carmaker. We took somewhat widely publicised goals at that time. So at that time we were more nervous than we are today.

A car-azy idea

Q: What sparked off the idea?

A: In this particular case, you could not help but notice there were three-four family members on a scooter with a kid standing in the front, the guy driving and his wife sitting side saddle holding a little kid. When you are driving a car, you say to yourself to be careful, you know they may slip and fall. Add to that slippery roads and night time riding and you have a reasonably dangerous form of transport. That does not mean scooters should not exist—it's an evolution of bicycles and it's the path to prosperity. But, scooters as family transport seemed dangerous. I asked myself if we could put two wheels at the back to give the scooter greater stability. Would it make it safe for the occupants if you put a bar over the top? Last year, I was at Bertoni and to my surprise I found that BMW had produced a scooter with the same safety bars that I had thought about with rubber bumpers on the side and a seat which had a seat belt. Apparently it was not successful and BMW withdrew it.

I set about thinking if we could make a four wheel vehicle from scooter parts. At an ACMA (Automotive Component Manufacturers Association) meeting I even suggested an Asian people's car—a really low-cost car that Malaysia, Indonesia and India could produce jointly. I got no response. The only person who showed encouragement was [Hero group's] Brij Mohan Munjal, but we never really took it further. We found later that using scooter parts is a real limitation.

So we changed tack. We decided to look at everything from scratch. I thought that we could have a car made from engineering plastics that would not be welded but use adhesives. But some of these concepts did not lend themselves to costs or volume manufacturing. So we moved on to a more conventional kind of car.

That led us to configure a small car which would be a full-fledged car. We started again in an evolutionary way. It started with a concept of being a four-wheeled rural car. Do we have roll up plastic curtains instead of windows? Do we have openings like autorickshaws have instead of doors, but have a safety bar? We had many such early concepts and we finally decided that the market did not want a half car. If we wanted to build a people's car it should be a car and not something that people would say, 'That is a scooter with four wheels or an autorickshaw on four wheels'. And so we decided to do a car and really pare the cost.

Breaking on through

Q: What were the most challenging moments?

A: Perhaps the bigger, more visible issue is that we needed to benchmark ourselves against something. And we took the Maruti 800 as the benchmark in terms of acceleration—driveability should at least be equal to Maruti and in some areas it should exceed the Maruti. So we had to increase the size of the engine to give us the kind of performance we have now achieved.

The rest were issues relating to costs. Where do you put the fuel tank? How close is the filler neck to the fuel tank? How much tubing to the fuel tank? Those kind of issues.

Q: Any examples of the breakthrough you talked about?

A: We haven't changed. It is a four-door car, five seat, rear engine and in many ways conventionally constructed. What has been done is in things like the door lock —it is the same lock on all four doors, they are not left hand and right hand door locks. When you see the car what will strike you is that we have packaged it really tightly. Most of the benefit we got on cost is because we used less steel. We just made the car smaller outside, yet big inside.

People's car

Q: Will this car change the group?

A: That's not what it was conceived for. The kind of thing you would do to follow on from this would be different fuels—can we produce an electric version of the car? Can we produce a small hybrid version and really make this car the platform for a new set of personal transport needs? One thing we have established is that we have created an affordable personal transport that will take four or five people under all weather conditions, running on regular fuel and not on some exotic stuff.

Q: There has been criticism that this car will choke congested roads. Is that an elitist view?

A: We produce about 7 million two-wheelers a year. Today we must have 60-70 million two-and three-wheelers in the country. Last year we produced about 1.4 million cars and at some point we will exceed two million. Well, nobody says anything about that. It is only this car that is being targeted. You may say, 'Well, the two-wheeler takes less space.' Our car pollutes, if not less, then certainly not more than a two wheeler—not per passenger but as a vehicle. Our engine conforms to Euro IV and Bharat III—all two wheelers are Bharat II today. So, yes you may take a view that this small car will take less space than a large car. It will carry four people instead of the normal two on a scooter and therefore, instead of two scooters, you will have one car on the road.

That criticism also assumes that the small car will not replace a bigger car. You produce two million cars and you produce half a million small cars, so you produce 2.5 million cars. That's not how it is going to work. We will cannibalise some of the existing low-end cars and two-wheelers, and even some of our own cars. The Indica too is going to feel the effects. So it will not be that it will be on top of everything and there won't be a square inch of space on the road.

Second, we are looking at congestion in the top major cities. Have we got affordable family transport in the two tier and three tier cities? Is it their lot not to have a vehicle? The huge potential lies when India gets connected in the rural areas.

Q: Who are your potential customers?

A: Rather than look at it geographically, look at who might be the buyer of the small car. If you look in the US or Europe, in some garages that have a Bentley or two, or a high-e

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