The inspiration of Tata Motors to Build Nano
Ratan Tata, the chairman of Tata Motors, was motivated by his desire to dominate the emerging car market in India. The company offered low prices as compared to the competing brands to expand its market are remain competitive. The use of scooters and motorcycles in common in India. Tata was focused on utilizing this opportunity and provide Nano as a substitute. The tiny car also aimed at ensuring that families in India do not travel for long distances using scooters. The company was thus motivated to provide a safe method of transport since scooters did not cater adequately to the safety of families.
Tata Motors establish the major characteristics of including a need for low price, adequate comfort, safety, and efficiency. This made the company to provide a brand that met these features. For example, Nano was designed in such a way that it had a headroom where four people can sit comfortably. The need for customized experience by customers was also a major issue that motivated Tata Motors to build Nano. The company produced deluxe and standard versions that had a wide range of colors besides other accessories, thus making the car to be customized to the preferences of customers.
Innovative Steps Adopted While Designing Nano
The design that was adopted by Tata Motors during the building of Nano was based on the needs of families. Apart from the headroom and leg space that was used in the design, the four doors were made to have a high seating position that made egress and ingress easy. The company also designed the company in such a way that it had a snub nose as well as a sloping roof. The dimensions that the carmaker used were also major innovations that had not been adopted by any other motor vehicle company. The length of the car is 3.1 meters, height of 1.6 meters, and a width of 1.5 meters.. Don't use plagiarised sources.Get your custom essay just from $11/page
The compact dimensions were used to ensure the car easily maneuvered on busy roads and in rural areas. The mono-volume design, with power train located at the rear and wheels at the corner, the brand is able to combine maneuverability and space. The partners and engineers who made Nano did not just use the features of the existing car and designed a low-cost model, they looked at the lives of their customers and adopted a cost-cutting approach (Rakić & Rakić, 2014). For example, Nano was made using a smaller engine since more horsepower would be wasted within the cities of India. Even though it has a maximum speed of 65mph, it meets the emission and safety requirements of India.
Addressing Quality Issues While Developing Nano
During the 9th Auto Expo in New Delhi, Tata noted that when he observed families using scooters, he wondered whether this was a safe, affordable, or proper mode of transport for families. This made the company’s designers and engineers to allocate four years to attain their goals. This made the company produce the People’s Car, which is not only affordable but also follows emissions norms and fuel-efficient. Given the lack of adequate emphasis on safety and quality by other motor vehicle manufacturers in India, Tata was focused on providing a brand which has a fuel-efficient engine and lean design strategy that has assisted the company in optimizing performance per unit of energy consumed in addition to minimizing weigh.
The last design that Tata considered as the best included the weight of 1,322 pounds, making it lighter by 528 pounds as compared to flyweight Honda. The engineers adopted a 33-horsepower and 623-cc, 2-cylinder engine. As a result of these features, a high quality Nano was produced with an uncommonly efficient of at least 47 miles per gallon. The safety performance of Nano exceeds the Indian regulatory current requirements. The car has an all-sheet metal body and a strong passenger compartment, including safety measures like crumple zones, seat belts, and intrusion-resistant doors.
Political Risk of Developing a Low Budget Car in India
A major political problem started in 2006 when the company announced that it would start manufacturing Nano in Singur. The company made plans to acquire land from the West Bengal government and build the plan with the key objective of producing the Nano. The whole project, including purchasing 600 acres, cost the company over $300 million. The problems continued when Tata purchased the land from the West Bengal government. Before the company purchased the land, the land was not owned by the government, but it had acquired it from local farmers after the use of a force of eminent domain. One of the major reasons as to why the government was focused on bringing the company to state is because it realized that through Nano, the industries in West Bengal would be rejuvenated and deal with the poverty that faced the religion due to the government overreliance on farming.
The manufacturing problems that Tata faced started when more than 400 hectares of farming land was taken over by the government to be given to the company for manufacturing purposes. The authority offered compensation, but some farmers with small farming lands were against the compensation and demanded that the land be given back to them. According to the farmers, the company forced the farmers to move from their lands, and the payments were just a small part of the value of the land. The company was also required by Mamata Banerjee, the leader of Trinamool Congress, to return the 400 acres of land where Nano would be manufactured to farmers. On its part, Tata argued the land was important for making 60 parts required to make Nano and that by ensuring the suppliers are close to the factory, the cost of Nano would be significantly be reduced.
Advantages of Tata Motors Forming an Alliance with another Automobile Company
By forming an alliance with another automobile company, Tata would benefit in various ways. First, the company would access resources and knowledge from other firms. Most of the motor vehicle companies in India and other countries have unique know-how regarding how to manufacturer their brands. This implies that through such an alliance, Tata would use similar knowledge and resources to improve its brands (Joan, Alejandro, and Beuhla, 2008). An alliance with companies like Hispano Carrocera and Daewoo Commercial Vehicles Company would help Tata to access new markets. While focusing on forming a strategic alliance, it is vital for companies to note that the expansion of the target market is one of the major strategies of ensuring sustainable success. Since Tata would form an alliance with an organization that has already captured the market, the former will utilize this as an opportunity to penetrate new markets. Tata would also benefit from economies of scale (Thompson and Twait, 2011). This refers to the advantages that the company will enjoy due to greater volume of production and huge orders from vendors.
The popularity of Nano outside India
Outside India, Nano has gained great popularity due to the low price and the safety measures that this brand adopts. For example, in China and Brazil, Nano is the best seller low-priced car. As Nano continued to dominate the market, the competitors created competing brands, for example, Figo by Ford Motor Company, Datsun Redi.Go by Nissan Company, and Econ by Hyundai. For Nano to win the confidence of the American consumers, it was noted that the brand was to undergo various upgrades with the objective of meeting the safety requirements of the market.
Tata as an Ethical Leader in the Automotive Industry
In the automotive industry, Tata is an ethical leader based on its concern regarding the safety of its customers and the protection of the environment. According to Ratan Tata, the company has established a people’s car that is affordable and meets safety requirements besides considering emission norms. Since Nano was designed with a family in mind, an aspect that is indicated by the low price, comfortability, safety, and fuel efficiency, it is an indication that the company aims at making the world a better place and avoid the disasters that emanate from global warming. Tata was also concerned about the security of its employees. For example, during the protests in 2008, the company evacuated the employees from the company sites and threatened to move out of West Bengal to avoid any kind of damage to its resources.
References
Joan, J., Alejandro, L and Beuhla, D. (2008). The Effectiveness of Strategic Alliances. IESE Business School- University of Nevada.
Rakić, B., & Rakić, M. (2014). Integrated marketing communications paradigm in digital environment: The five pillars of integration. Megatrend Review, 11, 17–23.
Tata “Nano”: The People’s car Case.
Thompson, S and Twait, S. (2011). High Risk to High Reward: How to Dig In, Solve Problems, and Create a Valued Alliance Management Function. Strategic Alliance Magazine (Q3): 7–21.