Tata's $2,000 Nano Sedan Comes With Its Own Heavy Baggage

Some super-expensive cars, including Ferrari, Rolls-Royce and Bentley are available with custom fitted luggage, done-up in the same color and material which graces the car interior.

The Tata Nano, the world's most inexpensive production car, publicly launched this week in New Delhi, India, also comes with its own baggage, but not the kind which many car-buyers would want.

Tata is one of the biggest manufacturing concerns in India, and its size allows the company to sell Nano, at least initially, for either a small profit or even at a loss (see: Toyota Prius). Depending on the Indian Rupee's exchange value, 100,000 Rupees makes the car a good buy as it hits showrooms throughout the subcontinent. Right now, the retail 100,000 Rupee cost equals about USD $2,000.

Nano has been a positive for Tata worldwide, but more of a negative within India.
(Protesters in West Bengal, where Nano was slated for production, burn a Nano effigy on the day of its public introduction in New Delhi)

But good press can equal bad press, too, and positive media coverage about the car has been offset by Tata's political and social problems in its home country.

Reuters India reports that, "Tata Motors on Thursday unveiled its 'People's Car', the 4-door Nano, which will be the world's cheapest car with a dealer price of 100,000 rupees.

Following are some details on the car, which was presented at the Auto Expo in New Delhi.

* Length: 10.17 feet

* Height: 5.25 feet

* Width: 4.9 feet

* Engine: Nano has a throbbing (my little joke) 33-horsepower engine and is rear-wheel drive. The 2-cylinder, 623 cc, multi-point fuel-injection petrol engine is rear mounted. Tata said it was the first time a 2-cylinder gasoline engine was being used in a car with single balancer shaft.
(Ratan Tata, chairman of Tata's board of directors, introduced the Nano at a media event in 2008)

* Safety: Tata said the Nano has an all sheet-metal body, with safety features such as crumple zones, intrusion-resistant doors, seat-belts, strong seats and anchorages, and the rear tailgate glass bonded to the body. Tires are tubeless.

• Environment: Tata said tailpipe emission performance exceeded current regulatory requirements, and the Nano had a lower overall pollution level than two-wheelers made in India. It said high fuel efficiency (20 km/litre) ensured low carbon dioxide emissions." (end of Reuters report)

But while the media and public launch was taking place in New Delhi, activists near Kolkata, in West Bengal, where Nano was originally slated to be built, were burning the car in effigy. The Trinamool Congress, a West Bengal opposition group, torched a mockup of the Nano in protest over land rights at the factory location.

"Until farmers get back their land forcibly acquired for the Tata Motors small car plant at Singur, we will not allow the company to manufacture cars there," opposition leader Partha Chatterjee decreed, according to The Economic Times of India.
(Nano's interior appears basic and functional)

In New Delhi, a small group of protesters made a less dramatic showing, but their T-shirt slogans were bold, The Times of India reported: "The ($2,500) car has Singur people's blood on it."

Tata and Nano have become poster children for nameless government bureaucracy, corporate arrogance and a seeming willingness by the Indian government and industry to consider their own benefit first, and those of citizens last.

The Tata plant where Nano was originally scheduled to be built was shut down by protests after local residents protested what they said were illegal land-seizures to increase the factory's size and capability.

The story appears similar to the protests, often violent, which occurred during the building of Japan's Narita International Airport, about 50 miles north of Tokyo.

Locals accused the government of using a confiscatory form of eminent domain to appropriate land for the airport from farming families which had owned it, in many cases, for several hundred years.

The historic city of Narita near the airport is one of the oldest extant in Japan and contains a huge Buddhist temple complex where both Sumo wrestling and Kabuki dramas are said to have originated; Tokyo could not have been surprised by the strong reaction to building the airport, which serves as Japan's major port of entry and departure.
(Protestors square-off against police at Japan's Narita Airport in February, 1971; it's been said that Japan was near a civil war at the height of the violence)

Pitched battles between police and protesters forced the government to turn the airport into something of an armed camp, which it remains to this day. Army and police troops, mobile water cannons and even tanks and other military vehicles are seen throughout the airport complex.

All vehicles headed for Narita are stopped at heavily-fortified checkpoints about a mile from the airport for inspection, and all travelers must opens their luggage and show passports, plane tickets and other travel documents.

The Narita protests were and still are reported on worldwide (in the last year, a rocket was fired across one of the runways). Both India and Tata must be happy that there was barely any coverage of the Nano factory protests outside of India and Asia.

Tata was forced to delay the Nano's debut as the company moved production of the car from West Bengal state to New Delhi.
(Nano hits Indian dealerships this week, and will be sold in Europe in 2 to 3 years; an American version is on the drawing board, but not yet scheduled for production)

The Hindu newspaper update service reports, "Pillorying the opposition for its "most destructive" agitation that forced Tata's Nano project out of West Bengal, the state government Monday said the launch of the small car in far-off Mumbai was an "unfortunate day" for the state.

Mamata Banerjee, whose Trinamool Congress-led agitation had forced the project out, said she couldn't care less.

Speaking to the media, a crestfallen state Industries Minister Nirupam Sen said: "It (the small car) was supposed to have been launched here. It was a sensational international event which could not happen in our state. It is an unfortunate day for Bengal."
(Tata says Nano's all-steel frame and body panels are positive safety features; safety must be improved for European and US standards before the car can be sold there)

Ms. Banerjee on Monday said she was not bothered by the event and lost her cool with journalists for asking whether she now regretted her campaign that forced the world's cheapest car out of West Bengal.

"We don't care for Nano. That is not our business. We ignore it," Ms. Banerjee said when asked by mediapersons for her reactions to the Nano launch."

Future plans for Nano?

A European version is planned for sales sometime in the next two to three years, and a US version has been hinted at by the company.

Would Americans buy such a small car, with a top speed of barely 60 miles per hour?

Nano would need big design changes to meet US safety and some other requirements. But in this current marketplace, US dealers are having trouble selling the tiny Smart car, and sales of BMW's Mini have slowed to a crawl, too.

More than 7-million motorcycles were sold in India in 2008; Tata's Nano will no doubt put a lot of those buyers and new- and used-car intenders on four wheels, and a motorcycle leisure culture may also develop. Milwaukee's own Harley-Davidson, with slow sales and an ever-graying US audience, may set its sights on India as they have on Japan, where they have enjoyed more-than-modest sales success.

And as you read this, Tata is asking the UK government for financial assistance to keep their newly-bought Jaguar and Land Rover franchises alive.

Comments

[Sangeet Jaiswal]

Tata Nano is really a remarkable innovation. In India we have limited resources, so innovation and research is the only hope to utilize these minimal resources in the best effective way possible. They have spent 1500 Crore Rupees for research on Nano, and the product is cheap, but at the same time, its a value to the price. Ofcourse you cannot compare it with other cars in market, but it is a completely new segment for those families who move around sitting four on a motorcycle, a great help to them thanks Tata.

Share your feelings for Tata Nano on http://blog.careyournano.co.cc

[texaslib82]

who are the real "losers" in nano moving out of west bengal, a communist ruled state in India: the people of west bengal...the real winner, the Gujarat chief minister and the people of Gujarat...
Great gong Tatas....awesome...

[Deadgnome]

BRING THE SMART CAR EN MASSE TO AMERICA

[Steve Parker - Huffpost Blogger]

Great piece in today's Los Angeles Times (Friday) where the writer posits the national savings in money, oil and lives if the government took $46 billion from the Department of Energy and Recovery Act and bought us all a new Prius.
Steve

[jaynevada]

Yeah, nice idea in the LA Times article...

But here is an improvement.

The LA Times article is based on the Prius getting 50 miles per gallon. The Nano gets 56.

So instead of spending $46 billion a year, the government can achieve the same by spending $4 billion a year by buying Nanos instead of Priuses. (at $2,000 per Nano compared to $23,000 per Prius).

[aganji]

Indians taking umbrage for criticism against Tata should put their nationalistic pride in their pocket and think about this objectively. Tata's are no saints, they are not doing Indians a favor with this car, so lets not elevate them to heroes. Their corporate moral quotient is quite low with the shady land deals they struck with the Bengal government and their refusal to return prime agricultural land back to the farmers. Their choice of Gujarat, a BJP ruled state, to build the factory is also carefully calculated. Remember how effectively Gujarat tackled the Narmada Bacho Andolan 'activists'.

Also, there is a growing murmur about the port they are building in Orissa for the nano that will kill endangered Olive Ridley turtles. Greenpeace has been crying hoarse about it for a while now. See their campaign about it:
http://www.greenpeace.org/international/news/tata-turtles-nano-debut-031909

[jaynevada]

@ aganji...

Yeah, I am sure you would much prefer that all Indians did was farming.

[jaynevada]

Parker writes "Would Americans buy such a small car, with a top speed of barely 60 miles per hour?"

Actually the top speed is 65 mph, a bit different from "barely 60". http://www.autobloggreen.com/2009/03/23/tata-nano-launches-today-56-mph-for-1-985/

Parker next writes: "US dealers are having trouble selling the tiny Smart car, and sales of BMW's Mini have slowed to a crawl, too."

Totally absurd! The Smart retails for $13,000 and the Mini for $17,000. Why are they being compared to a $2,000 (okay, $4,000 by the time it reaches the US)?

[Steve Parker - Huffpost Blogger]

Mini sales, January/February 2008: 5,875
Mini sales, same months, 2009: 4,908
This in spite of more available base model and two new varaints, the Cooper and Estate.
Smart sales, January/February 2008: 1,742
Smart, same months, 2009: 3,191
Sales increase due to increased availability, but even at that rate, Smart will come up far short of their goal of 25,000 units (less than 19,000, actually) in 2009.
And Penske Automotive, the US' sole licensed importer and seller of Smart, had their credit rating lowered this week, a real auto industry first.
This from Automotive News:
"Orders are still coming in, and showrooms still draw shoppers, but Smart dealers report an increasing number of cancellations for the petite ForTwo, primarily because of economic concerns.
"Since November, it seems people are backing out of purchasing a Smart," says Sean Sarraff, brand manager of Smart Center Germantown in Maryland.
That creates "orphans" — unsold cars sitting at dealerships. Sarraff has 48 Smarts at his store. And 25 are convertibles, which are unlikely to sell in winter.
Smart's retail system is set up to discourage orphans. The U.S. distributor, Penske Automotive Group Inc., requires that a Smart be ordered by a consumer before the car is shipped to a dealer. Ordering can be done via computer at a dealership or through Smart's Web site, smartusa.com. Dealers can order only demonstrator cars."
Steve

[jaynevada]

Okay Steve, I will repeat my question.

Why are you comparing a $17,000 (Mini) car and a $14,000 (Smart) car to a $4,000 (Nano Europa) car?

You must believe that consumers do not care about price when they buy a car. That the demand for a Smart car tells us something about the demand for a Nano that costs less than 1/3 (repeat one-third).

Tell me, do you always pay 3 times to fly first class rather than economy, or always by a Mercedes S 500 rather than a Camry?

[Shrinath]

Nano, has been aimed at the first time car buyer who would invest in a motorcycle rather than a car. In effect he is all about capturing a large segment of the two-wheeler market. Nano is not vying for space in the passenger car segment but rather in converting the motor cycle buyer.

Moreover, I do not think Nano would be a good product barring very few cities. For example, I would rather feel safer in a SUV or a sedan while driving on say the 405. I wonder what strategy Tata Motors has. I wonder if they will ever have an electric version. That would be interesting indeed.

[TJCole]

The transmission is the most innovative feature of this car it is based upon a design by that automotive visionary Leonardo Da Vinci....if I remember correctly...

[Steve Parker - Huffpost Blogger]

Another interesting point is that well more than a decade ago, Chrysler began a project to build a small third-world car made of plastics and resins and glued together, with metal mostly in the drivetrain and suspension.
Even that recently, other car makers were envious of Chrysler for some of their small car technologies; today, Chrysler is begging Fiat to take them over so Chrysler can learn Fiat's small car technology.
Steve

[jaynevada]

Quite honestly, this article is quite unbalanced besides having factual errors.

To set up an industry in a populated country like India needs land that someone is already farming. India has thrice the population of the US with one-third the land. So should no industry develop in India?

Being a democracy, whenever there is land taken from farmers (which in US "eminent domain" law would be perfectly legal) there are always some politicians who will create trouble by leading some farmers in protests. And by the way, the state government in West Bengal is communist, and the opposition was led by TMC (which is not communist).

The communists wanted the Nano to be produced in West Bengal as after many decades of industrial destruction they realize they need industry for development.

Finally the production of the Nano was moved to Gujrat, not Delhi like Mr. Parker thinks.

[Steve Parker - Huffpost Blogger]

I apologize for the Delhi mistake. New Delhi is where the Nano first appeared publicly. It will be built in Sanand, Gujarat State and a satellite plant at Pantnagar.
Don' you just hate it when those darn politicians and citizens cry and whine about "eminent domain?" I mean, really, those people just have to get with the program! Everyone knows that in a democracy, industry and their reps in government know best what to do with land which has been in families for over 1,000 years (he wrote tongue in cheek).
Guv'nr, are you sure your comment wasn't originally posted in, say, 1870, in the Times of London?
"Nano" means "small" in Gujarati, the language of the founders of the Tata Group.
Steve

[jaynevada]

Note that India doesn't have a lot of empty land like the US (India = one-third land for 3 times population)

So essentially your position is... because taking land from farmers is bad... therefore no industry should develop in India... let all Indians live in poverty.

I would guess most Indians would not agree with your desire for a non-industrialized India.

[Heraklia]

A little off topic here, since you were writing more about land seizure and political problems in India than the U.S. market possibilites for the Nano car: I would not want a Nano myself because it sounds like little more than an enclosed riding mower. Not powerful, and so tiny it would be crushed flat in a collision with an SUV. Many years ago I drove a diminutive Renault Dauphine (yes, it was one of the ten worst cars of all time), which struggled mightly up gentle inclines, nearly fell off the road every time a truck passed it, and got dented if you sneezed on it.

But I remember the gas lines last summer, and the increase in sales of small cars, and dealerships refusing to accept any more SUV trade-ins because there was no market for used SUVs. If gas prices shoot up again and stay up, more people will be interested in cars like the Nano.

Besides, people are broke now. Many would choose a new $2,000 tiny Nano with a warranty over a used $2,000 big clunker that will need another $2,000 in out-of-pocket repairs the first month you drive it. And don't forget that Chery Motors of China plans to enter the U.S. market with a small cheap car too. If the tiny cars turn out to be decent quality and dependable, there will be buyers.

[InjunTrouble]

Mr Parker has not done his home work. The people protesting the building of the factory in West Bengal were not 'activists' in any sense of the term. They were actually former residents of the area led by several professional politicians from the communist party. I have nothing against the communist party (I am pretty left wing myself), but they were merely trying to extort more money from the Tatas (whose offer to the farmers for their land was actually quite generous).

The protestors did not count on the Tatas giving up on their land and choosing a different state for the factiry. In the end the farmers who were counting on making a substantial profit off the acquired land were left with nothing - I don't think they will not be following the communist party leaders any more in the future.

[Steve Parker - Huffpost Blogger]

Thanks for the post. Those "professional politicians from the communist party" can be a real drag, can't they?
My comparing the Narita Airport problems to those of the West Bengalis made it clear that the "activists" in that Indian state are landowners.
As "generous" as you think Tata has been with the landowners, the company is begging the UK government for money to keep their Jaguar and Land Rover franchises in business - Tata bought both from Ford last year.
Maybe Tata is not as wealthy as much of the media says they are.
Steve

[zaz33]

Mr. Parker - What is the latest on the "City Cat" compressed air car? Is this on your beat?

[bluelephant]

Mr.Parker, I was hoping your views would be more balanced considering your experience in auto industry. If you put the protests against Tata in perspective, you could get a clearer picture and it would emerge that Tatas were ready to pay higher price had they known it upfront. They did pay more when they relocated the Nano plant to other Indian state without any wrongdoings or protests. So, I agree the Tatas were in part to blame but not more than any business in the world would do to try to lower their operating expenses.
Additionally, for the Jaguar and Land Rover businesses if you look at the other side, if Tata does not ask/get UK government money, they could lay-off thousands of people without second thoughts. Also, Tata asking money is no different than BAC asking bailout money after MER acquisition except Tata being a foreign company.
So, I really hope that you look at both the sides of argument and have a balanced view.