Wednesday, January 23, 2008

Renault-Nissan to Proceed With Rival to Tata's Nano

bajaj small car ( a potential partner for Renault)

Jan. 23 (Bloomberg) -- Renault SA and Japanese affiliate Nissan Motor Co. will proceed with building an ultra low-cost car to rival the Nano unveiled by India's Tata Motors Ltd., Chief Executive Officer Carlos Ghosn said.

``We'll go ahead with it,'' said Ghosn, who heads the second-largest French carmaker and Tokyo-based Nissan, in an interview with Bloomberg Television at the World Economic Forum in Davos, Switzerland.

Renault and Nissan are looking for sales growth in emerging markets to make up for stagnating demand in their home countries and the dollar's declines against the yen, which undermines the value of Nissan's North American earnings. The Nano, which Tata plans to price at about $2,500, may upstage Renault's no-frills Logan, which costs buyers about four times as much.

Tata's Nano capacity may be increased to 500,000 vehicles

The production capacity of the Rs 1 lakh car Nano by Tata Motors at Singur may be ramped up to five lakhs per annum in three years, if vendors planning to supply components, are to be believed.

"Tatas plan to increase production capacity of Nano at Singur to five lakh vehicles in three years and we are ready to cope with demand for components," claimed Sandipan Chakravorrty, Managing Director of Tata Ryerson, which is one of the key component suppliers for the Nano.

Tata Motors has announced a first phase production capacity at 250,000 per annum for Nano, which could be expanded further. The small car is to roll out in the third quarter of the next fiscal.

Tata Ryerson, a 50:50 JV between Tata Steel and Ryerson Inc, will supply the load bearing member (chassis for the car) and 16 non-load bearing components.

Chakravorrty said the components, which would use a technology which would be the first in Asia, were tested in international laboratories.

Sunday, January 20, 2008

Tata Nano - OEM, Supplier Relationship

(source newsletter, 14th January)
Tata divided the components into two types – proprietary designs and Tata Motors design. For proprietary design components, Tata went with established suppliers such as Bosch (which supplies the engine management system and has significantly contributed to the future diesel engine). Bosch split the development between its design centres in Bangalore and Germany. Using local design capabilities was a crucial decision, as most global design centres were accustomed to designing high-end systems, employing development staff at a significantly higher wage levels.

For components and systems designed in-house, Tata Motors chose suppliers with strong process capabilities who could give valuable suggestions and improve on the designs. Nearly everything has been sourced locally and the Nano will have 97% local content from day one. Tata’s supplierswere an integral part of not only the design and development process, but also purchasing.

While Tata started work with 600 suppliers and a total of 1,800 supplier-part combinations, these were eventually narrowed down to 100 suppliers for the platform.

Hydro-forming is used for all the Nano’s tubular structures, resulting in weight reductions and simple production processes and stamping has been replaced by roll-forming process. Roll forming allows a common tooling for a number of parts, fewer operations and better productivity. Tata not only worked on its own processes but also helped its vendors innovate.

Cost saving was also achieved by using thinner materials wherever the design allowed, so the bumpers are only 2.5mm thick, against 3mm on the Tata Indica super mini.

Half of the 100 vendors for the project are co-locating with Tata in a 350-acre vendor park in SIngur next to the new Tata plant. Instead of annual contracts, Tata went with long term volume contracts with its suppliers, driving down the costs even further. The suppliers received significant volume commitments from Tata Motors, with about 75% of the components being single-source and about 90% of the total car being outsourced.

A three-shift operation and consolidated purchasing with suppliers allowed for a further reduction in costs.

While the first plant at Singur will eventually have a capacity of 350,000 units, Tata wants to set up three other plants in different parts of India to sell a million units per year eventually. With four plants in various locations, the company aims to save significantly on logistics and inter-state taxation.

Tata’s current challenge is to have all the suppliers in the vendor park up and running by the start-of-production of the plant. With the Nano, Tata is aiming for a less than 100 ppm rejection rate (better than existing Tata plants) and a ten-fold improvement in warranty costs.

CNG Nano?

What better way to get the biggest bang for your buck than a CNG Nano (the petrol Nano promises 20 km per litre).

Though Tatas are not telling whether they are on the road to a CNG Nano, a top Tata official said: "We will first roll out the petrol Nano. We will work on other fuel options as well."

With CNG kit makers like Shrimankar Fuel Technologies Ltd promising to run bikes and scooters on small CNG tanks which can accommodate 1kg of gas, why can't the Nano?

Currently, M-800 fits in a 60-litre water capacity tank that packs in 10-11 kg of CNG.

"Though we have not figured the space Nano has, we can design a special kit," says Shrimankar who feels CNG will make the Nano sweeter by slashing running costs by over half to around 0.85 paise per km as against Rs 2.38 per km on petrol (Ahmedabad's fuel rates).

Thursday, January 17, 2008

Some TATA nano jokes

I must apologize to our non-hindi reading audience. But then, a picture's worth a thousand words!

Friday, January 11, 2008

India Domestic Market Share for Vehicles

India Vehicle Manufacturing Capacity

Installed Capacities in the Indian Automobile Industry 2003-04
2003-2004 2004-2005
Installed Capacity (In Million) Installed Capacity (In Million)
a) Four Wheelers
a) Four Wheelers
b) Two &Three Wheelers
b) Two &Three Wheelers
c) Engines
c) Engines

Primary focus - two wheelers

The family two-wheeler, which is in the range of 75-125cc, costs Rs 35,000-50,000. This segment accounts for 92% of the two-wheeler market in India in terms of sales. With the launch of Nano (supposed to cost Rs 100,000 + taxes), the spillover will happen from this two-wheeler market to Nano.

Delphi Experience on Tata Nano - Keeping instrumentation simple

Speaking about the company’s experience with cost control for the Rs 1-lakh car, Mr Ashok B. Ramaswamy, President and Managing Director, Delphi India, said that there was a considerable amount of lateral thinking that the Indian development team had to do to come up with ideas for crashing the cost structure.

So, the instrument cluster was kept basic with just a speedometer, odometer and turn indicator signals being featured. The other ways by which Delphi cut costs for the component supplied was by eliminating screws and replacing them simply with panels and parts that just snap on firmly.

Also the clear plastic panel that covers the display was curved at an angle to eliminate reflections and glare, a simple solution compared to the usual anti-glare coatings and so on.

Mr Ramaswamy felt that Tata Motors choose Delphi’s solution because of its expertise in systems integration capabilities.

He also mentioned that while the company’s US-based product development teams are used to working on feature-rich, content-rich products, the Indian product teams are more focused on cutting costs.

This was a big reason why, though the Indian team is also used to developing global products, it was also able to think innovatively to develop low-cost technology solutions such as the Nano instruments and the engine management systems for fuel-injected two-wheeler engines.

How Tata Nano stacks up Vs other historic low cost cars

Thursday, January 10, 2008

Ratan Tata on Assembly of the car

"The first thing I would like to do is get a mature product in the Indian market and seed this market effectively. My aim was that I would produce a certain volume of cars and create a very low cost, very low break-even-point plant that a young entrepreneur could buy. A bunch of entrepreneurs could establish an assembly operation and Tata Motors would train their people, would oversee their quality assurance and they would become satellite assembly operations for us. So we would create entrepreneurs across the country that would produce the car. We would produce the mass items and ship it to them as kits. That is my idea of dispersing wealth. The service person would be like an insurance agent who would be trained, have a cellphone and scooter and would be assigned to a set of customers. This is just a concept. He will deal with their problems on a self employed basis and would be paid by the assembler and the customer.

It would be satisfying if the small car created 10-15 satellite groups of young engineers who could get together and do a business. They would never be able to get normally into assembly of cars. I think it will be a very satisfying thing for me to see them succeed.

What we will do outside India will be a conventional distribution system. Find an assembly plant and assemble the product in the conventional form."
(excerpts from Mr. Ratan Tata interview in ToI)

10% of two-wheeler market?

Speaking to CNBC-TV18, Anand Rathi - Automobile & Transportation, said that almost 10% of the two-wheeler market may shift to Tata’s new Rs 1 lakh car. He said, “ The car is priced at Rs 1 lakh and one look at the dealer margin and if we add the VAT the registration charge, the base model could workout to be Rs 1,30,000 lakh on road.With a Rs 30,000 down payment, you can take a loan of around Rs 1 lakh and EMI works out to be around Rs 3,716 per month. With just Rs 3,700 per month on an EMI, I believe anybody can afford this product. As far as the shift is concerned, initial estimates is around 10% of the two-wheeler market can actually shift towards the small car.”

Nano explained

(from NY Times - Take it with a grain of salt!)

Impact on pollution?

While we agree that there will be an impact, look at what other countries are doing and where they are! India is really nowhere!

In 2005, Indian vehicles released 219 million tons of carbon dioxide, the leading greenhouse gas blamed for global warming.

By 2035, that number is projected to increase to 1,467 million tons, due largely to the expanding middle-class and the expected rise of low-cost cars, according to the Asian Development Bank.

By comparison, USA emitted 5,912.21 million tons of carbon dioxide in 2004.

Tata Nano - Interior

Minimalistic! But its meant to be that way!

Competition to Tata Nano - Maruti 800

Maruti 800 is a city car manufactured by Maruti Udyog in India sold at around $5000. It is a rebadged version of a Suzuki Alto. It has a 3 cylinder engine of 37 bhp (28 kW) at 5000 rpm.

It used to be the largest selling car in India until the Maruti Alto recently took that title. It is also exported to a number of countries in southeastern Asia including Bangladesh and Sri Lanka, and to some South American markets (as Chile, sold as Suzuki Maruti), and was available in selected European markets between 1988 and 1992, sold as the Suzuki Maruti. The car comes in different versions including one with air conditioning and one without. It was launched in December 1984 with almost 100% imported content.

Competition to Tata Nano - Bajaj Small car

Bajaj silently unveiled its 'Lite' concept car in New Delhi, two days before the much hyped launch of Tata Motors' Rs 1 lakh car.

Bajaj Auto, the country's second biggest two-wheeler maker, said it plans to bring out its small car in collaboration with Renault and Nissan within four years but it will not be for Rs 1 lakh (Rs 100,000).

"I know Carlos Ghosn (President and CEO of Renault and Nissan) has set a target of 2010 for Bajaj-Renault car. While it is hard to put any time-frame, we can say in two-four years we can expect to have the product ready," Bajaj Auto managing director Rajiv Bajaj told reporters in New Delhi.

Bajaj declined to give a specific price of the small car. Ghosn has earlier stated that Renault was looking for a $3,000 car in India, a move triggered by Tata Motors' Rs 1 lakh car that will be unveiled later this week.

Other Cheap cars - Chery QQ

Chery QQ :
which sells in China for about $3,900. It's apparently a copy of the GM-Daewoo Spark, introduced in China in 2003. The car is at the center of an industrial rights controversy, since GM have claimed that it is very similar to the Chevrolet Spark/Daewoo Matiz. GM executives have proved that the doors of the Chery car can be mounted on the Chevrolet Spark without modification, and Car and Driver, an automobile magazine, even calls it "a copy".

Tata Nano pictures

Nano Unveiled

These are the first shots of the world's cheapest car called Nano. It is non-polluting; it is safe; it has an AC and it looks good!

Tata Nano Specifications

Dimensions: 3.1 metres (10.23 feet) long, 1.5 metres wide and 1.6 metres high. Can seat four to five people.

Engine: A two cylinder 623 cc, 33 horsepower rear mounted, all aluminium, multi-point fuel injection petrol engine can power the car to top speeds of 105 kilometres per hour (65 miles per hour).

Fuel Efficiency: 20 kilometres per litre, or 50 miles per gallon is claimed.

Pollution: Exceeds Indian regulatory requirements and can meet strict Euro IV emission standards. In terms of overall pollutants, Tata says the car is better than two-wheelers manufactured in India currently.

Safety: Car exceeds current regulatory requirements with a strong passenger compartment, crumple zones, intrusion resistant doors, seat belts, strong seats and anchorage.

Initial Annual Production Target: 250,000 units to rise later to 350,000. PRICE: Basic model price 100,000 rupees (2,500 dollars) plus tax and transport costs, which will bring on the road price to at least 120,000 rupees. The price of two deluxe models that will include air-conditioning and other features to be announced later.

Nearest Domestic Car Rival: Maruti 800, part of Japanese-owned Suzuki Maruti stable whose base model sells for about 4,800 dollars -- nearly double the price of the Nano.

Nearest International Rival: China's Chery QQ which retails for 3,600 dollars.

Sales: Tata will focus on selling the car in India for the next two to three years, before eyeing Latin American and Southeast Asian markets.

Market: India's car market is a huge draw because car penetration is just seven per 1,000 people, compared to 550 per 1,000 in such countries as Germany or 476 in France, according to the Society of Indian Automobiles.

Company Details: Tata Motors is India's largest vehicle company with revenues of 7.2 billion dollars in 2006-2007. It is the leader in commercial vehicles, such as trucks and buses, and the second largest in passenger vehicles. There are over four million Tata vehicles on Indian roads.
(source : Times of india)