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It's not Tata, it's the govt, stupid!
January 14, 2008
Whatever else the Tata Nano may have achieved or not achieved, it has -- for the first time -- got the entire country talking about a car, instead of cricket or religion or politics.
I thought I too should add my two-paisa bit to the debate. My credentials? My Indian passport, my mechanical engineering degree, and the fact that I have a lower carbon footprint than the average car-owning Indian -- I own a large gas guzzling car that I use a maximum of three days in a month.
Most days I take a bus or cycle to work, a distance of 15 km from my home.
My reaction as an Indian
India has so far been known as a source of cheap labour, of a limitless pool of people who can implement ideas that other people have come up with.
Vast segments of Indian industry today are based on services that involve making something that has been designed outside India, like automobiles and auto parts, IT products, garments, et cetera. The risks are lower here, but the rewards are lower too.
When you create something from scratch, the risks of failure are very high but the rewards can be very high too. We have become a risk-averse country and have forgotten the thrill of creating things.
There was actually no need for Tata Group chairman Ratan Tata to have taken this risk at all. All or most Tata companies are doing extremely well and will do well for some time to come, even without the Nano. If the car had failed, Tata Motors' [Get Quote] name would have been mud or close to it. Seen this way, the Nano was a tremendous risk.
The only reason for Ratan Tata to take the risk is in this statement of his, comparing the Corus buyout to the Nano: "Corus was a transaction. It got a lot of visibility but we didn't build anything. There is a different level of excitement when you are building something."
For a truly great entrepreneur, business is not all about making money. It is about the excitement of creating things. I hope the Nano will inspire more true entrepreneurs, who create rather than just transact.
As a mechanical engineer
It must have taken a tremendous amount of lateral thinking to come up with the ideas that have gone into the Nano. A lot of the ideas seem simple now, when someone has already thought of them.
However, when every other car manufacturer in the world is doing something one way, you've got to be either crazy or extremely confident to do it some other way. Single wiper, single tail light, tubeless tyres to reduce weight, rear engine to eliminate the drive shaft -- lots of such ideas.
It is easier to design a car with just one design constraint -- low cost OR good aesthetics OR small size OR high fuel efficiency OR high passenger safety. The original 'people's car,' for example, had just one constraint -- low cost. 'People,' after all, do not need aesthetics or safety or luxury, and just need to get from point A to point B. The beauty of the Nano is that it has been designed with multiple constraints -- low cost AND good aesthetics AND small size AND high fuel efficiency AND high passenger safety.
Lean is the buzzword in manufacturing worldwide. Lean manufacturing is the production of goods using less of everything: less material, less time, less energy, less human effort, less manufacturing space.
The Nano is lean. It uses less steel, less plastic, less space and less energy to run.
As a tree-hugger
There have been numerous criticisms of the Nano on the grounds that it will be an environmental disaster -- we do not have enough space of our roads, our fuel bill will go up, pollution will increase, etc. . .
Sure, it is a known fact that public transport (meaning buses and trains) is far more efficient in terms of road space usage, energy usage and pollution than cars or two-wheelers.
So what do we expect Tata Motors to do? Totally stop producing cars and only make buses? Not a problem for Tata Motors. They can do this. They already make buses that are sold the world over. They are right now developing buses that will run with fuel-cell engines, which use liquid hydrogen as the fuel and emit water vapor as exhaust. Road trials are expected later this year.
The problem is not the Tatas. It is the government.
In enlightened countries the world over, public transport is encouraged, subsidised and given top priority in various ways by policy guidelines. In India there are no such policies.
Cities and towns are designed for private transport. Using public transport is considered infra dig by the populace. The government subjects public transport to very high rates of taxation instead of subsidising it. Buses are considered a nuisance on the roads. Town planning (if it is done at all) does not include planning for public transport.
My city, Bangalore, is a classic example. The government here is in the process of destroying the city by cutting down thousands of trees which gave it the tag of 'green city.' Instead of introducing more buses, roads are being widened to accommodate the exploding population of cars and two-wheelers.
So who will the Tatas sell their buses to?
The criticism directed against the Nano is better directed at the government, to force it to develop and enforce a public transport policy. Once such a policy is in place and the nation requires buses instead of cars, Tata Motors will then make buses instead of cars. If they can come up with an innovative car like the Nano, they'll definitely come up with an equally innovative bus.
G V Dasarathi is a director of a firm that makes software products to improve manufacturing productivity.
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