New Product Development Life Cycle Of Tata Nano

NEW PRODUCT DEVELOPMENT LIFE CYCLE

OF

TATA NANO-Mr. Sandip Kadam

MMS Operations(87)R.I.M.S.R

What is the Product?DIMENSIONS • Overall Length:3099 mm • Overall Width: 1495 mm (& 1620

mm with ORVM) • Overall Height: 1652 mm • Wheelbase: 2230 mm • Ground clearance :180 mm • Min. Turning Circle Radius: 4 m • Seating Capacity: 4 persons • Fuel Tank Capacity: 15 Liters • Kerb Weight

– Nano 600 kg – Nano CX 615 kg – Nano LX 635 kg

• Payload 300 kg

ENGINE & TRANSMISSION • Engine Type: 624 cc, 2 cylinder,

MPFI • Maximum Engine Output: 35 PS

@ 5250 rpm • Maximum Torque 48 NM @

3000 +/-500 rpm • Maximum Speed: 105 kmph • Gradeability 30% • Transmission: Synchromesh on all

forward gears, sliding mesh on reverse gear with overdrive on 4th gear

• No. of Gears: 4 Forward + 1 Reverse

What is the Product?SUSPENSION

• Front: Independent, Lower Wishbone, McPherson Strut with gas filled dampers

• Rear: Independent, Semi Trailing arm with coil spring & gas filled shock absorbers

• WHEELS & TYRES • Tyre Type: Radial & Tubeless • Front Tyre size: 135/70 R12 • Rear Tyre size: 155/65 R12 • Spare Tyre size: 135/70 R12 • Wheels : 4 B x 12

BRAKES • Brake Type: Dual Circuit, Vertical

Split operated by tandem master cylinder – Nano CX With Vacuum

Booster – Nano LX With Vacuum Booster

• Front: 180 mm dia. drum brake

• Rear: 180 mm dia. drum brake

Idea Generation

At Affordable Price

TATA NANO • “I observed families riding on two-wheelers –the father driving the

scooter, his young kid standing in front of him, his wife seated behind him holding a little baby . This could be very dangerous in night travel or in stormy weather.” [Problem]

• “It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family” [Dream]

• “Tata Motors’ engineers and designers gave their all for about four years to realize this goal. Today, we indeed have a People’s Car, which is affordable and yet built to meet safety requirements and emission norms, to be fuel efficient and low on emissions” [Criteria]

• “We are happy to present the People’s Car to India and we hope it brings the joy, pride and utility of owning a car to many families who need personal mobility.”[Success]

Idea Generation

• To create safe, affordable, all weather form of transport for a family

• To create an option for people who want to move from 2 wheeler to 4 wheeler in affordable price (As little as 2 Wheelers)

Idea Screening• A scooter with 2 extra wheels at the back for extra

stability?• An Auto-Rikshaw with 4 wheels?• 4 Wheeler car made of Engineering Plastics?• 4 wheeled rural car?

But Market Wanted a Car and It should be like a Car

Not something that people will say, “Ah! That’s just a Scooter with 4 wheels and not really a car!”

Concept testing And Developing

• Mr. Girish Wagh talked with customers• 3 Wheeler men inevitably insisted on cheap and

dependable truck• But he still kept asking “Why do u want a 4

wheeler?’’• Finally he got the answer, “If I had a 4 wheeler, I

would have better marriage prospects in my village.”

• 4 wheels have emotional appeal, not just practical

So What Type of New Product To Be Developed?

• Car to cost Rs. 1 lakh on road

• Car to be built on different platform than conventional ones

• It must meet all the safety and regulatory requirements

• It has to be built on a scale which is double than the earlier launches

• A Truly People’s car: Low cost, Safe, Fuel Efficient

Business Analysis

• Cost: What makes the Nano so cheap?

Important Decisions

• Establish a factory in a tax free zone• Get the tax advantage 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

DEAL OF TATA NANO (@Gujarat)• A loan of Rs. 9750 Crore at 0.1% simple rate of

interest• Repayment of this loan @ 0.1% over 20years.• They got 100% exemption on electricity duty• The 1100 Crores Land has been given with high

subsidies without any stamp duty registration and transfer charges

• The payment for land would be made in eight equal annual instalment at a compound interest of 8% p.a.

Total Sales Estimation

• Demand for people’s car shall be at least twice that of demand for Maruti 800

• Initial projections were 500000 cars per year

• Assumption: 10% of 9 million 2 wheeler market transit to 4 wheelers and that will explode the demand

Product Design & Development• Design Inputs from Institute of Development

in Automotive Engineering, Italy• Constant Design changes• Design adaptations from Daewoo Matiz and

Tata Indica• 37 patents associated with the design of

Nano• Modular Design Revolution: The Nano is

constructed of components that can be built and shipped separately to be assembled in a variety of locations

Continued…• “Gandhian Engineering” Approach i.e. More from

less for more and more people

• Much spacious than Maruti 800 (20 % more)

• Use of Aluminum Engine to reduce weight and cost

• Use of light weight steel wherever possible

Prototype Development• First Prototype: Vehicle which had bars instead of doors and

plastic flaps to keep out the monsoon rains. It was closer to a “Quadricycle” than a car, and the first prototype

• Engine Issue: 540 CC engine when fitted on the prototype, lacked the necessary power. So its capacity was increased by 9%, then by another 9%, finally settled to a 623 CC engine

• Foot pedal had to be realigned to create more legroom• The body had to be changed because Ratan Tata, over six feet

tall himself, wanted it to be easy for tall people to get in and out of the car

• "Imagine the pain of the body designer -- he went through hundreds of iterations, then at the last minute the car length was increased by 100 millimeters!"

TestingCrash testing

Testing On Torture Tracks

Testing On Torture Tracks

Production• Manufacturing facility located at

Sanand, Gujarat• 725 acres (for TATA) + 375 acres

vendor’s park• At the vendors park 41 vendors

allocated plots• About 80% of the value of

components to be sourced from the park

• Began with a capacity of 2.5 lakhs cars/annum

(Expandable up to 3.5 lakhs cars/annum)

Continued…

• Resource estimation• Engineering operations planning• Department scheduling• Supplier collaboration• Logistics plan• Program review and monitoring• Contingencies

Commercialization

• Launch the product

• Produce and place advertisements and other promotions

• Fill the distribution pipeline with product

Marketing of Tata Nano

“The TATA NANO innovation was not just in technology ;It was in mindset

change.”

Thank you