“A PROMISE IS A PROMISE”

The Tata Nano is the cheapest car in the world, with a price tag of less than $ 2500.

“Nano” means small in Gujarati, the language of the founders of the Tata Group. It is another
“first” in the 140 year old history of the Tata Group. Jamshetji Tata laid the foundation of the
Tata group in 1868. Taj Mahal Palace and Towers, India’s first luxury hotel was opened in 1902,
India’s first iron and steel plant (TISCO) was established in Jamshedpur in 1907, Tata hydro
electric power supply company in 1910, Tata Oil Mills (foray into consumer goods industry) in
1917, India’s first aviation company, Tata Airlines in 1932, Lakme (manufacture of cosmetics) in
1952, Tata Chemicals in 1939, TELCO ( locomotive and engineering ), now Tata Motors, in 1945,
TCS, India’s first software services company was set up in 1968, fast forward to 1998 and

the launch of the first totally indigenous passenger car, Indica in 1998 and now the Nano in
2008. The Tata legacy goes on.

Ratan Tata, another able scion of the illustrious Tata family took over the reins of the Tata
Group from JRD Tata in 1991. Today the Tata Group’s total revenue is $ 70.8 billion (around
325,334 crores) . It has 96 companies operating in 7 business sectors in more than 40 countries
across 6 continents.

They say, “ NEVER STOP DREAMING , because dreams become thoughts, thoughts become
action, action becomes reality.” Ratan Tata seems to have just proved the adage right. He
started thinking about the development of the world’s cheapest car in 2003, inspired by the
number of Indian families commuting on unsafe two – wheelers rather than safer four-
wheelers. This thought was reinforced into action by the following incident and quoting him,

“I was interviewed by the Financial Times [British newspaper] at the Geneva Motor Show and I talked
about this future product as a low-cost-car. I was asked how much it would cost and I said about Rs1
lakh. The next day the Financial Times had a headline to the effect that the 'Tatas' are to produce a Rs
100,000 car. My immediate reaction was to issue a rebuttal, to clarify that was not exactly what I had
said. Then I thought, I did say it would be around that figure, so why don't we just take that as a
target. When I came back our people were aghast, but we had our goal."

Henry Ford’s Model T was built exactly 100 years ago (September, 1908). Ford wanted to make a car for
the multitude, not for the elite, with the best materials, the best design that the technology of his time
and he wanted to make it, above all, at a price that was affordable. This was the underlying philosophy
of Ratan Tata and he followed this is with great determination.
Tata refined the manufacturing process, emphasized innovation and sought new design approaches
from the suppliers. With such an aggressive cost target, carryover components were ruled out as there
was nothing in the Tata stable in terms of size and price. Cost saving was achieved in all departments
such as design, development, purchasing, production, materials, logistics and sales. Nearly everything
has been sourced locally and Nano will have local content from day 1. Tata suppliers were an integral
part of not only the design and development process, but also purchasing. Most of the vendors are lo –
located with Tata in its vendor park, to save on costs. Instead of annual contracts, Tata went with long
term volume contracts with its suppliers, driving down costs further. “HYDROFORMING” was used for
all Nano’s tubular structures, resulting in weight reduction and simple production processes. Common
tooling for a number of parts, fewer operations and better productivity. Innovative marketing using
unconventional media like websites, blogs, social networking sites and official merchandise. No matter
how small or big changes ranging from installing the engine in the rear to 3 nuts on the wheels instead
of 4, cost cutting was initiated in all heads.

Bosch, who supplied the engine Management system, split their operations between Germany and
Bangalore to cut down costs. Bosch, in fact is actively involved in making the new Diesel engine for the
later Nano diesel version.

Notwithstanding the Singur unrest at West Bengal and the prices of materials having escalated from
13 % to 23 %, the end result has been a car which is nothing short of WORLD CLASS. The car is very
fuel efficient (26 km/ltr on highway and 22 kms/lts in the city), has been designed at Italy’s (Institute
of Development in Automotive Engineering) , has a two cylinder (full aluminium engine with MPFI and
624 c.c. rear wheel drive engine), complies with Bharat Stage III and also Euro IV emission standards,
and has met all the stringent full frontal crash and side impact crash tests, specified by the
Government .

Ratan Tata, Chairman of the Tata Group, Ravi Kant, the previous MD of Tata Motors, P.Telang, the
present MD of Tata Motors and Girish Wagh, General Manager, Tata Motors have been chiefly credited
as the people behind making of the Nano.

The launch of the Nano could expand the Indian car market by 65 % and bring down the cost of
ownership of an entry level car by 30 % notwithstanding the impact it will have on millions of Indians.

It remains to be seen when Tata Motors will break even with the Nano project, but it has been offered
at the price around Rs.1,00,000 which was promised by Ratan Tata and there is no doubt that he has
kept his part of the bargain of “ A PROMISE IS A PROMISE “.