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India’s Tata low-cost Nano took a lot of high-tech

For a simple little car, the Tata Nano has achieved a big profile. It’s unusual for the unveiling of any car to receive so much coverage in newspapers around the world, doubly so when it’s a car made in India with only a slim chance of selling in Europe. The reason is that the “One Lakh car” will sell for 100,000 rupees (€1,700), around half that of the next cheapest vehicle. Its sales potential in India is enormous.

A trend that started in 2004 with the €5,000 Dacia Logan is likely to become more conspicuous in the next few years. VW plans a low-cost model to outprice its Fox small car. Toyota is working on a vehicle priced below the Dacia Logan. Hyundai-Kia has similar plans, and so do many others.

The potential market for affordable cars in the developing economies of Brazil, Russia, India and China is massive. Germany, Italy and France have 400-600 vehicles per 1,000 population. In China and India it is 80 and 34 per 1,000 respectively.

But it is not easy to make a profit, however slim, on such vehicles. It’s likely that many business plans will rely partly on the financing, but the vehicles will require a mix of clever cost-focused engineering and the reuse of existing tooling and parts. It’s a comparatively low-risk enterprise. Developing a money-making car for Europe’s fragmented, stagnant market requires a lot of technology and costly assembly to deliver the necessary levels of quality and customisation.

The Tata Nano goes much further than the Logan in its low-cost approach. Whereas the Logan platform has the flexibility to form a light commercial vehicle (See page 8), the Nano is designed purely as a replacement for a motorcycle as the transport for the average Indian family. Comparisons with other cars are pretty irrelevant.

Tata chairman Ratan Tata puts it succinctly: “For families that normally ride on two-wheelers – the father driving, his kid standing in front, his wife seated behind him holding the baby – it’s a safe, affordable all-weather form of transport.”

The Nano is 3.1m long, 1.5m wide and 1.6m high. It has a steel body with crumple zones, basic side-impact protection, seats and belts. It is rear-wheel drive and the engine in the back is a 623cc aluminium gasoline unit with two cylinders and a single balancer shaft. It produces 24kW.

India’s experience in low-cost manufacturing and its growing strength as a centre for outsourced engineering analysis work makes it a logical birthplace for the Nano. Even so, Girish Wagh, Tata’s man in charge of the project, drew on the skills of a mix of in-house expertise, local and international suppliers. The vehicle’s design, a combination of simple-to-manufacture panels and plastic mouldings, was devised by the IDEA Institute of Italy.

The base version of the Nano will have a manual gearbox, but a continuously variable transmission will be offered as an option. Kinetic Engineering of Pune will supply the unit.

Tata has ventures with international companies that are likely to supply parts: Tata-Yazaki makes wiring harnesses, Taco GS Yuasa makes batteries, Tata-Toyo radiators, and Tata Johnson Controls seats. Some suppliers, such as sealing firm Freudenberg, have a lot of standard solutions that required no further development cost. “We defined the requirements and delivered exactly what was wanted without over-engineering,” says the company. “The sealing packages for the Nano are produced in a joint venture with NOK.”

Others have expertise in low-cost, high-quality manufacturing. The effect of faulty parts on margins is greater on a car like the Nano. Caparo will press and assemble some of the inner structural panels. “The body technology is conventional, but the manufacturing requires sophisticated analysis to ensure zero-fault-forward quality control at low cost,” says Caparo chief executive Angad Paul.

Ficosa is supplying mirrors, washer system and gear shifters. These are not standard parts, says the company’s R&D director, Vicenç Aguilera: “Basing the design on cost instead of prioritising the technology required a specific development to reach Tata’s quality and reliability standards.”

GKN produces the driveshafts, also tailored to the vehicle using every opportunity to minimise cost. “It required technological capability from Europe to support the localisation of every component in India,” says the company. “The reduction of technical complexity we achieved is tremendous.”

Bosch developed the starter-alternator and the injection system for the engine. A system for a diesel version will come later. Wolf-Henning Scheider, president of the company’s gasoline systems division, says it’s a profitable business for Bosch: “For a BMW M3, the engine’s the most important part of the car. For a one-lakh car, the main thing is that it has a roof, four doors and four seats. The margins are smaller as a result, but the volume per variant is higher.”

Engineers in Germany performed a lot of the development for Bosch’s Value Motronic injectors. The engine management system was developed in China. The application work and the production engineering took place in India.

The result is a system that costs less than half that of a conventional European engine. The first-generation system achieves Euro III emissions levels with on-board diagnostics (OBD). Future versions will be able to pass Euro IV without costing any more. “At the moment low-cost cars require only Euro III,” says Scheider. “OBD will be the next step, which is why we have already integrated it.”

The cost-saving starts in the hardware with greater integration of the electronics than on other engine management systems. This is possible because programmes like the Nano allow suppliers to use more standard components than usual, giving economies of scale.

The system manages without temperature and pressure sensors, emulating them with software. It means the performance isn’t the same in all driving conditions, but the consumer in a Nano is unlikely to criticise this.

But, with a two-cylinder engine in such a lightweight vehicle, NVH did still have to be addressed. Vibracoustic of Germany developed an engine-mounting concept. It was not a cheap product, says chairman Reinhard Schütz: “The solution is simple and economical but it took high technology to come up with mountings and torque rod to produce a modern standard of ride comfort for a vehicle of this class.”

Safety standards on low-cost cars are different, but so are the requirements. Most cars in the category weigh 800kg or so and do not achieve the same speeds as conventional vehicles, so the brake system can be less powerful without compromising stopping ability. Suppliers, including TRW, Bosch, Continental and Caparo AP Braking, are working on systems optimised for low-cost manufacturing.

Scheider of Bosch expects the market for more advanced safety systems to develop fast. “Demand for ABS, ESP and airbags will grow twice as fast as in Europe and the US,” he says. “The next generation of low-cost vehicle will need ABS adapted for road conditions in emerging markets.”

Tata plans to build 250,000 cars a year at first, building to a million within three years. It’s ambitious, but essential if Tata is serious about making the Nano a “people’s car” for India.
It may be that such volumes are also essential for turning a profit. Several firms have said it’s hard to see what margin Tata can achieve on the Nano.

It’s possible that the firm may be prepared to make a small loss on the vehicle. The suppliers will not be. They’ll also use the experience on low-cost systems to improve their competitiveness in other markets.

Suppliers to the Tata Nano