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The Tata Nano has now been launched in India. Despite much comment about whether it can be made for US$2,000 or US$2,500, and the issues surrounding the location of the manufacturing plant, the ability of a company to develop a car, which can be manufactured and sold for an amount cheaper than many consumer elctronic goods is an amazing achievement. As for now orders are being taken but the first nanos won't be on the road until July, and It will be in July and onwards where we will see if the dream of the nano matches with reality, and it will only be some months after that where we will see if it translates into profit for Tata.
Let us consider the manufacturing first. The car has a body, it has an interior, it has wheels, it has tyres, it has instruments... All of these have to come from raw materials(which have increased in price since the original design concept was created), which are then processed by companies in the supply chain and then assembled into the final product. It will be a real feat of supply chain management for Tata and its suppliers to manage the supply chain effectively, and the supply chain will need to be as lean as they come, to maintain any level of margin for a car that sells for US$2,000. There is no room for error in the supply chain - any build up of inventory is going to have a serious impact on the owner of that inventory.
As for the engineering, the innovative/cost reduction features include a boot / trunk that is only accessable from the inside, a single windscreen wiper, and the use of glue instead of welding. We will only really know the 'quality' of the product when it starts to be used in any sort of volume, any quality issues caused by the design or by the manufacutring process are going to be very big news indeed, as the Nano has caused such a storm amongst the manufacuturing industry and indsutry watchers will be quick to point out the faults. It will also be interesting to watch the spare part management to see whether the plans the Tata has made for provisioning the various service agents around the country will work.
I am very much looking forward to the arrival of the first nanos on the roads to see if this marvel of manufacturing management really is reality!
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