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to change their traditional operating paradigms. the emerging ultra-low-cost car market promises to create rich opportunities—and risky challenge importantly. Spark. news releases in the media media videos history & values leadership quick look corporate social responsibility locations • publications o executive agenda o commentaries o business issue papers o research reports o books o external articles A Nano Car in Every Driveway? How to Succeed in the Ultra-Low-Cos Henry Ford’s historic promise in 1908 to “build a car for the great multitude” resulted in the production of more than 15 m of $2. a new and improved automotive operating model will emer the entire industry. General Motors. expects to introduce another low-co announced in August that it would market three models in China. in India. which produces the mini-car.500 to $5. Today. Over the longer term. Undoubtedly. Preserve and Protect or Participate and Prosper? It is indisputable that the competitive landscape has been altered dramatically and permanently (see sidebar: The Mark sector (see figure 1). all indicators point to an automotive industry in reces high fuel costs and low consumer confidence.000. . [of] the simplest designs that mod (ULCC) market have the same agenda in their attempt to build a car with a price tag of $2.500? To fulfill his promise “to build a car small enough for the individual to run and care for. which is lowe But this is not a history lesson that can be easily repeated.

engineers opted for cheaper manual processes rather than automated one Standardize at every stage of the value chain. only 100 remain. manufacturing and distribution approaches to achieve ultra-low-co product launch missteps and market economics. Tata encouraged its design and manufacturing suppliers to be innovative—to redesign parts f manufacturing operations. where the Nano will be assembled and then delivere As demonstrated with the Nano. the clean-sheet approach offers another significant advantage: innovation in product d . Invent rather than adapt. A new set of low-cost competitors The other choice for manufacturers and suppliers is to participate to capture share in the fastest growing segment of th Apply a Clean-Sheet Approach Early movers on both the manufacturer and supplier sides have demonstrated that nothing less than a clean-sheet app guidelines. Cooperate with suppliers. design experience to craft innovative low-cost components. too. Reduce the number and complexity of parts. Similar to Henry Ford’s apocryphally attributed “any-color-so-long-as-it’s The Nano’s distribution model reflects its innovative heritage. The dynamic and powerful ultra-low-cost car market is forcing manufacturers and suppliers to decide between two strat between manufacturers and their new component standards and lower target prices.It is equally indisputable that using traditional design. By focusing on the essentials and encouraging creativity in making compo lug nuts to reduce cost. Tata began the development process with 600 closely integrated suppliers. The company plans to mobilize large numbers of thir sent to a number of strategically positioned satellite mini-factories. such as welding.

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