The media frenzy around the unveiling of Tata Motors’ Nano, may drown two of the most significant aspects of this project - firstly, it is a completely new product, which aims to make personal transportation accessible to those who could not afford a car earlier; secondly, and more importantly, it provides a glimpse of the manufacturing revolution that has largely bypassed India, so far.
While Tata Motors has a long history of making commercial vehicles, it launched its first passenger car only in 1998. In the last ten years, it has produced a million cars, but remains a relatively small player in the passenger car segment. That such a minor player on the global stage can so radically reengineer a product as to access new customers, while meeting international safety standards, makes it an unqualified managerial success. Doubtless, it has made significant technological leaps too, and there is some talk of possible patents as well.
Today, it is widely accepted that mobility and communication are critical to economic and social participation. Yet, in most poor countries, low-cost public transport is uncertain or non-existent, and many poor families have to risk life and limb by braving city traffic on two-wheeled scooters or motor-cycles.
Exactly a century ago, in 1908, the Ford Model T put “America on wheels”. The assembly line off which it rolled increased productivity so much that a worker could afford to buy the car with four months' worth of wages. At the same time it shaped American sociology, by showing how personal mobility greatly enhanced personal autonomy. It is a strange coincidence that the Nano is priced very similarly to the Model T - its price in 1920s would equate to $ 3000 in 2006 dollars. And the Tata Nano will cost about $ 2500. Of course the Nano is a huge technological advance, packing 33 hp to the Model T's 20, with a fuel efficiency of 20 km. to the liter, compared to the Model T's 5 to 9.
But the most significant fall-out of Nano may be the realization that low cost manufacturing is not the domain of China alone. Like Ford T, Tata Nano’s real contribution may be to demonstrate the competitiveness and technological viability of manufacturing in India. The industrial revolution may yet come to India, riding the Nano; a century late, perhaps, but better late than never.
Of course, much more economic reform is necessary if India is to experience the much needed industrial revolution. But Tata’s Nano gives us a glimpse of the possibilities.
Not surprisingly, there are many who have expressed concerns about the prospect of the masses accessing personal automobiles. The issues they raise range from the impact on oil prices and a concern for global warming, to traffic congestion. Most such commentators have not been known to eschew their personal automobiles, or other modern conveniences, but have no qualms in frowning upon the masses enjoying some of the same benefits. This desire to keep others off the life-boats of their standard of living is a common feature of many who claim to have social or environmental concern in their hearts. One fact worth reminding them of is that transportation is one of the biggest expenses faced by rural poor seeking health care.
The opposition to Nano is also an illustration of the head-in-the-sand mind-set, which pits rising demand for consumption against environmental conservation.
In fact, as more Indians are able to afford more cars, the scale of consumption will help improve the technology, improve efficiency and clean up the environment. It is not a coincidence, that Toyota's ascent up the world auto league has been accompanied by its pioneering efforts in new technologies and innovation. Though counter-intuitive, it is true of most areas of enterprise that only enhanced scales of consumption lead to improvement in efficiency - in this case, easily measured by tail-pipe emission. It is worth noting that while Toyota sold well over 9 million vehicles in 2007, Tata Motors took ten years to sell its millionth passenger car.