Friday, January 11, 2008

NO 'NOs' FOR THE NANO


On January 10, 2007, Ratan Tata, the creative soul and father of the Tata Group, stunned the automotive world by launching the cute $2500 Tata car, Nano.

Ratan Tata had dreamt of the car four years back when he saw a family of four on dangerous Indian roads on a scooter. Like millions of other Indians, they had no choice but to brave the dangers and the elements on a two wheeler as they simply could not afford to buy even a cheap car. Ratan Tata decided to make a car that they could afford. Everyone who knew even a little about cars told him then that it was not possible to build a real car for only Rs 1 lakh, almost the price of an Enfield Bullet motorcycle! But Tata persisted, despite the ridicule, and Nano is the shining result.

On this historic occasion, it is only fair to remember the original dreamer of the ‘peoples’ car’, Sanjay Gandhi, the younger son of Indira Gandhi, who attempted to build one almost on his own in his factory, Maruti, in Gurgaon which was then in the rural outskirts of Delhi. Sanjay Gandhi even built few crude prototypes, but was not headed anywhere on the project, when he was killed in an air crash while flying a plane in Delhi.

Maruti, his creation, would have died too, had he been another ordinary citizen. But, Indira Gandhi called in the Japanese car maker Suzuki to keep Maruti alive and build the small car which Sanjay Gandhi wanted to. So, an emotional decision made to keep alive the memory of the Prime Ministers’ son resulted in the first car revolution in India. That wave was spearheaded by the Maruti 800 which still going strong after 23 years.

The 800 created a new class of car owners in India and gave a unique sense of confidence to the middle class that, till then, had aspired for little more than a two wheeler! People have forgotten that before Maruti rewrote the rules, High Income Group flats in Delhi came with attached scooter garages! How silly and unbelievable it sounds now.

The price of the Maruti 800, however, was about five times the price of a normal two wheeler. This price gap compelled a huge and fast growing section of the lower middle class, who wanted and needed a car, to make do with a scooter or, in the cities, pathetic public transport. A massive, untapped market was there but no one looked at it simply because everyone thought that it could not be bridged with a proper car that cost just Rs 1 lakh.

Till about five years back, mobile phones in India were mainly for the rich, with the existing players literally fleecing the few who flaunted their phones with exorbitant call charges. Dhirubhai Ambani, the visionary and inspirational founder of Reliance Industries, dreamt of making all Indians speak to each other at the ridiculous and seemingly impossible cost of sending a post card by normal mail. That dream revolutionized the industry and in an unimaginably short span of time, India is poised to have more mobile phone users than even the US has!

Capt GR Gopinath similarly dreamt of making Indians fly at little more than the cost of a train ticket. Air Deccan, India’s first low cost airline, was born and it has rewritten the rules of the game. Passenger air traffic has grown so rapidly that there are now serious infrastructural bottlenecks. No had ever thought that price-sensitive Indians would take to flying in such massive numbers.

The Nano is going to cause an unprecedented revolution on Indian roads, the likely magnitude of which is already giving ‘nightmares’ to some people, particularly environmentalists. Some of these metro based doom sayers seem actually to be worried about the discomfort and inconvenience that they are personally going to face on city roads and parking slots because of the impending Nano invasion on what has been their elitist territory. As far as they are concerned, lesser citizens should stick to the grind of traveling in buses, trains and, as a family, on absolutely unsafe two wheelers!

On January 10, 2008, apart from the Nano, another Indian car, the AmbieRod, designed by Dilip Chhabaria was launched at the Auto Expo in New Delhi. The most stunning car at the Expo, this very limited edition super luxury car, only ten of which will be made, will be powered by a BMW V12 engine that propels the McLaren F1 sports car. Its price? Well you could buy, yes, as many as 400 Nanos for the price of one AmbieRod! For this car, there are only gasps of admiration, no ‘nos’! The ‘nos’ are only for the tiny car which will jostle for road space with this beauty!

The Tatas will, as of now, be able to manufacture a maximum of 350,000 Nanos per year at their upcoming plant at Singur. I think the demand for a car in this segment will far exceed all estimates that are presently being made. Analysts seem to have forgotten what had happened after the launch of Maruti 800, before which only about 30,000 Fiats and Ambassadors were being sold in India annually. At that time, the economy was almost stagnant, taxes were sky high and any display of wealth at the then height of Indian socialism was considered vulgar. The 800 still made people break through all shackles and start an automotive revolution in the country. What is going to happen now when the economy is growing at over 9 percent and Indians have taken to consumerism with a vengeance?

Our planners would, therefore, be well advised to proactively assess the impact that the new Nano revolution will make. Already, the fast growing economy has forced them to order the six-laning of the Golden Quadrilateral and the North-South, East-West Highways, even as the four-laning has not been fully completed. Perhaps they need to upgrade and eight-lane these highways straightaway rather than a little later when the inevitable crisis is upon us. Similarly, in the cities, the road network, parking lots etc need to be substantially upgraded keeping in mind the worst-case impact of the massive number of Nano type cars that will be on the roads faster than present projections suggest.

Bleeding-heart environmentalists and other protectors of ‘history’ would do well to understand that change cannot be stopped; that the old has to give way to the new, as it always has. Above all, none of us has a right to ask that others be denied what we demand for ourselves and enjoy as a right. Is it not weird, for example, that most of those who shout the loudest against others for their cruelty to animals enjoy eating them the most!

The Nano will re-write rules not just in India but across the globe. Ratan Tata’s impossible dream has become a reality for a billion people. This small Indian wonder needs to be celebrated and applauded as one more example of incredible Indian ingenuity and creativity, born out of a simple, honest concern for those are usually ignored, without losing the business angle of it.

There simply can be no ‘nos’ for the Nano.

4 comments:

Georg said...

Bonjour Sharma,

he Nano was top topic here in French and German tellies.

If I am not totally mistaken, they said this car would consume about 5 liters of gasoline for 100 km. That seems to be quite a lot for a little car. Maybe a Diesel version slated for the very next years will be a little less thirsty.

My wife bought 2 months ago a Volkswagen Polo Diesel 1,4/80 HP.
This car needs on the road with 10% town traffic between 4,0 and 4,3 liters on 100 km. Not bad isn't it?
Should be said, too, this car was not 1700 Euros as the Nano but 16500 Euros.

Georg

Vinod_Sharma said...

Yes Georg, it the Nano does 100m/5litres. Pretty good for a gasoline engine.

The Tatas are essentially a diesel company and will soon come out with a diesel engine too, as Ratan Tata said after the launch. Although that engine will surely give much more mileage, it will also be more expensive than the $2500 basic gasoline version!

I must say your knowledge of this 'tiny' development so far away is impressive.

Sirensongs said...

you wrote: Above all, none of us has a right to ask that others be denied what we demand for ourselves and enjoy as a right. Is it not weird, for example, that most of those who shout the loudest against others for their cruelty to animals enjoy eating them the most!---

Well,all the people I know who "shout against" animal cruelty are strict vegetarians, such as myself. Never met any animal rights people who ate meat.

As for "denying others what we enjoy as a right," no one has a RIGHT to drive a car. A car is an elite privilege and should stay that way for the sake of the planet, environment and overcrowded cities. If Tata had just put all this wasted effort into public transportation the train might be decent enough that people would not resort to the cheap, fuel-wasting flights that are now so popular. I repeat: NO ONE has a "RIGHT" to own or drive a car.

In about a decade when no one can see or breathe, we will have Tata to "thank." At a time when the west is trying to learn from its mistakes, it's shocking to see China and India perpetuate the same wasteful behaviour.

Vinod_Sharma said...

You are one of those precious few who 'walk their talk'. If only there were more like you.

No one has a 'right' to drive a car? That is an interesting and provocative thought. Many million people who have been driving cars since the beginning of the last century will probably disagree. I do not what mistakes the west is trying to learn from. No one is giving up cars for sure. Even if many Nanos appear on Indian roads in the next few years, India will have far lesser cars than you will see on the roads in the US or Europe.

Yes, efforts to reduce emissions and thereby control pollution should be redoubled, but India and China should not be asked to carry the cross even as the west continues essentially in the same vein.

Nano is not an elitist symbol. It is, in fact, the vehicle which will help close the gap between those who own cars now and those who want to but cannot afford to. The ordinary Indian, the milk vendor, the auto rickshaw driver, the petty shopkeeper, these are the guys who suddenly find the door of an always far away car opening for them. Ask them how liberating and equalizing that feeling is. Nano is a long awaited gift for them. Let them celebrate it.