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.