New product Development

TATA Nano

Mahesh-A-Kapse

Development Process of TATA Nano

Idea Generation

Idea Screening

Option to make a scooter with two extra

wheels at the back for better stability.

A three wheeled car like a closed auto-

rickshaw.

Concept testing and

development

People wanted a four wheeler which was cheap, dependable and strong enough to carry a load of 1 ton.

It must be meeting all the safety and regulatory requirement.

Each engineer represented a different part of the car: engine and transmission, body, vehicle integration, safety and regulation, and industrial design

over six feet can also fit into the car without any discomfort

Business Analysis

Cost

COST REDUCTION PARADIGM: Value

Engineering Alternatives

Establish factory in a tax free zone.

Get the tax advantages on infrastructure development.

Get the suppliers to establish base near the factory.

Get special concessions from State Govt. In short

select a manufacturing location where all the

advantages could be achieved

TOTAL SALES ESTIMATION

Estimated demand would be twice the demand of

Maruti Suzuki 800.

Initial projections were at about 500,000 cars per year.

Only 10% customers of 9 Million two wheeler market transit to 4-wheelers it shall amount to 50% of the passenger car market share.

MARKETING

Product

Price

Place Promotion

Physical Evidence

Processes

People

CHALLENGES FACED DURING THE

DEVELOPMENT OF TATA NANO

Question of Safety

Mass Motorisation

Used car market effect

Cases of fire

Competitors

Cost cutting features

No Radio, Power windows, anti lock brakes, air

bags, remote locks or power steering.

Rear wheel drive.

Analogue speedometer, odometer and fuel gauge.

Single windscreen wiper.

Three lug nuts on the wheels instead of the usual four.

Radio or CD player is optional.

No airbags on any model.

624cc rear engine has only 2 cylinder

Comparison OF Tata NANO with motor bike and

Maruti Suzuki 800

Maruti 800 Tata Nano bike Engine

796 cc 623 cc 100 cc

Price(OTR)

Rs 225,000 Rs 120,000(88%) Rs.45,000

Down Payments

Rs 10,000 Rs 10,000 Rs 5000

EMI(60m)

Rs 3583 Rs 1833(95%) Rs 667

Kmpl

15kms 20kms 50kms

Making of TATA Nano

The mission began back in 2003

Team led by 32-year-old star engineer Girish Wagh

The suppliers

Germany's Bosch

GKN Driveline India

Engineers- team grew to comprise some 500

engineers.

Changed the engine designs three times.

INNOVATIONS INCORPORATED IN TATA

NANO

Strategic Innovations

Focused Innovation

SWOT analysis of TATA Nano

Strengths Weaknesses

Price 20 – 50% higher then the proposed rates

Small size Technical problems

Ease in handling Nano catching fire

Good mileage efficiency Political problems

convenience to drive in metro traffic

Opportunities Threats

convenience to drive in metro traffic. Alternatives by competitors

younger generation Chevy Spark

Structural safety tests

Its first basic structural safety tests which will becomes Indian structural safety standard in 2012.

The aim of the tests was to show that with basic modifications the present car could meet the existing safety.

Thank you…