Heroic Failure

A noble project to mobilise rural India safely, the Tata Nano was a failure. Today we examine the reasons why.

2009 Tata Nano (c) slideshare.net

The Tata Group is one of India’s oldest and largest industrial conglomerates. It encompasses a hugely diverse range of manufacturing and service companies, including steel, chemicals, consumer products, home appliances, energy, telecommunications, hotels, finance, investment and, since 1954, motor vehicles. Tata’s first domestically designed and built car was the 1998 Indica, a supermini-sized five-door hatchback that went on to become the country’s best selling B-segment model(1).

Ratan Tata, chairman of Tata group from 1990 to 2012, is the great-grandson of Jamsetji Tata, who founded his first company, a cotton mill, in 1868. Ratan Tata is recognised and highly regarded for his philanthropic and charitable work in India. Having launched the Indica, Tata recognised that the car was selling mainly in urban centres.

It was simply too expensive for the rural poor, whose only form of motorised transport was a motorcycle. These were often ingeniously (over)loaded with family members and their chattels, which may have looked amusing to onlookers, but resulted in frequent accidents, sometimes causing serious injury or death.

Tata regarded this as unacceptable and turned to the task of providing a safer form of mobility for the rural poor. He set his designers a challenge: to develop a small economy car that would accommodate four adults safely and in relative comfort. It must conform to all current and prospective safety legislation. It must be economical to run and cost no more than roughly twice the price of a typical small motorcycle.

An early prototype that was little more than a tubular-framed quadricycle with a canvas roof was rejected as simply too basic and uncivilised. Tata consulted with I.DE.A., the Italian industrial design company that had styled the Indica. It designed a neat four-door egg-shaped monobox car that was just 3,100 mm (122”) long and 1,390 mm (54¾”) wide. It stood on a wheelbase of 2,230 mm (87¾”) but was unusually tall at 1,650mm (65”) which made the interior remarkably roomy for such a small footprint. Thanks to the short wheelbase, small 12” wheels and its rear-engined layout, the turning circle was just 4 metres (157½”).

Costs were ruthlessly cut to the bone wherever possible. The wheels were fixed with just three studs. Only the driver’s door had an external lock and door mirror. The external fuel filler was deleted in favour of a cap on the tank under the bonnet. Contrary to appearances, there was no tailgate: access to the rear luggage area was via the passenger doors and the rear seat had to be removed to access the engine, a Tata designed 624 cc all-aluminium inline twin-cylinder unit, attached to a four-speed manual gearbox. The basic model even dispensed with heating and ventilation: the eyeball outlets and space for heater controls in the dashboard were simply filled with blanking panels.

2009 Tatano Nano base dashboard (c) beaming.com

In a press interview in early 2008 about the project when the prototype, which was called Nano, was revealed, Ratan Tata was asked how much the new car might cost. In an almost throwaway manner, he said, “About one Lakh”, which was 100,000 Rupees, or $2,500 (£1,250) at the time. Hence, it immediately became known as the One Lakh Car and that soubriquet would cause Tata many problems when the Nano was finally brought to market.

Championed by Tata, the new car had already taken on the mantle of a national project to improve the lives of poor Indian citizens throughout the country. Tata strong-armed suppliers into providing components at near cost-price, promising them enormous volumes of orders. Annual domestic sales were forecast at 250,000 units and there were plans to either export or build the Nano locally in overseas emerging market countries in Africa and South America.

The Nano project had also been envisaged as a way of bringing industry and employment to West Bengal, an impoverished rural state in the far east of the country. In 2006 it was announced that, with the agreement of the state government, a new factory would be built outside the town of Singur. Unfortunately, the local population was wedded to its agricultural traditions and wanted the land purchased for the factory instead to be distributed for farming.

The argument that the factory would bring much greater employment and prosperity to the area than the alternative use fell on deaf ears. The backlash, and mass protests supported by opposition political parties, forced Tata in September 2008 to relocate its proposed factory to Sanand, a city in the state of Gujarat in the west of India.

Unusually heavy monsoon rains delayed the building of the new factory and it was mid-2009 before production was able to begin in earnest. Such was the expected impact of the Nano that sales of small used cars fell by around 30% in anticipation. Over 200,000 prospective customers paid a deposit to pre-order Tata’s revolutionary new car.

High hopes: Ratan Tata (centre) at the launch of the Nano (c) businesstoday.in

Behind all the positive news, there was, however, a major problem: Tata had never publicly contradicted the One Lakh Car expectation, but the Nano cost considerably more than that to build, despite all the efforts to extract cost from the design. The first 100,000 cars were indeed priced at 100,000 Rupees, but the entry price was then increased by 78% to 178,000 Rupees.

At that level, the Nano was still the cheapest car on the market, but it cost the same as, for example, a nearly new Maruti 800. This was a locally built version of the Suzuki Alto, and India’s cheapest car after the Nano. The 800 was seen as a proper car and its sales, which had fallen sharply in anticipation of the Nano, quickly recovered.

There was another problem with the Nano, one of image. All the advance publicity had focused on the car’s promised cheapness. The launch advertising promoted it primarily as an alternative to a motorcycle. This fixed in buyers’ minds the perception that the Nano was (only) for those who could not otherwise afford a car. At 178,000 Rupees, the latter group could not afford a Nano, so stuck with their motorcycles, and almost nobody else wanted to be seen in one.

Inevitably, there a number of quality issues with early production cars from the new factory. Putting these issues right delayed production and many of the pre-orders were cancelled, even some that would have qualified for the one Lakh introductory price. It took two years before the Nano reached 100,000 sales and the majority of those sales were not to rural first-time car owners, but to urban dwellers looking for a cheap second car for city driving. The Nano’s diminutive size and tight turning circle made it perfect for this role. This encouraged Tata to think about a different export market and customer demographic for the Nano, a city car for Europe.

2009 Tata Nano Europa at the Geneva Motor Show (c) autoevolution.com

A heavily revised Nano with the suffix Europa was unveiled in late 2009 at the Geneva motor show. This had a new Euro5-compliant 1.0 litre three-cylinder engine, five-speed gearbox, wider tracks front and rear and larger 14” alloy wheels, ABS and traction control, twin airbags and electric power steering. Larger bumpers to comply with European crash regulations added 200 mm (8”) to the overall length.

All this extra equipment and a better-appointed interior meant that the Nano Europa was expected to cost between £4,000 and £5,000 in the UK. Unfortunately, when the Nano was subjected to Global NCAP crash tests by the German ADAC in 2014, it scored a disastrous zero stars for adult passenger protection, killing all hopes of European exports.

The end: Nano Global NCAP crash test (c) ADAC

Sales continued in the Indian market at levels far below expectations. The best annual total of around 75,000 units was achieved in 2011/12, after which sales declined steadily. A facelift and the addition of a tailgate in 2015 made no perceptible difference to sales. Attempts to find an alternative fuel source for the Nano, including compressed natural gas, electricity and even compressed air, came to nothing(2). Production finally ended in June 2018.

Over nine years on sale, a total of around 276,000 Nanos were manufactured. Tata consistently lost money on the Nano but, because of its hoped-for societal significance, persisted with it for far longer than pure commercial logic would have justified. Ratan Tata envisioned the Nano as India’s people’s car in the mould of the Ford Model T, VW Type 1 and Fiat 500. Sadly, it was not to be, but was instead a heroic failure.

(1) The Indica endured a brief parallel life as the ill-begotten 2003 MG Rover CityRover, recently covered by DTW and to be found here.

(2) There are rumours that a new EV version of the Nano will be launched in 2021.

Author: Daniel O'Callaghan

Shut-line obsessive...Hates rudeness, loves biscuits.

25 thoughts on “Heroic Failure”

  1. What a fascinating article – great writing thanks Daniel. Didn’t realise there were cars which scored ZERO NCAP stars but looking at the footage on YouTube, I can see why.

  2. I would expect most if not all basic and famous small cars from our past would fail these crash tests so no revelations there.
    The Smart car is presently the best example of pushing the envelope on size verses safety and this is reflected in its pricing, however it’s diminutive size still stigmatises the Smart as unsafe for the uneducated.

  3. Ratan Tata strikes me as a bit thick-headed through all this, certainly not verging on Musk’s level of controversy, but definitely not always the most rational or the most thorough. I’m surprised they ever tried to sell the Nano as a car in Europe given its clear total lack of safety engineering; is it too big to be considered a quadricycle? That seems like it would have been an easy backup plan, though clearly it never happened.

    I posit this: when, in the last twenty-odd years, has there ever been a ‘cheap’ car that has had a unique, ground-up design that has seen ‘runaway’ success (i.e. ~500k+ sales)? The formula for a cheap car since the 1980’s has been to take someone else’s existing manufacturing infrastructure and R&D work and then churn out as many examples as cheaply as possible. The margins are still razor thin, but there are no design amortization costs for the car and there is already a huge parts pool (OEM and knockoff, equally) that exists for the model (licensing fees being the only possible expense). The Maruti 800, as you state above, should have been a clear indicator to Tata that there was little room to ‘lower the bar’, so to speak, as its size is only 200 mm longer than the Nano and it was based on the 1979(!) Alto, produced until 2014. Clearly it was as basic a car as Indians would care to buy, and even with all the cost-cutting Tata’s space-age egg would never have seemed like a good value in comparison.

    Even large Western automakers have realized this—Dacia, anyone? The days of “mobilizing the masses” through some radical new idea like the Beetle, 2CV, or even Renault Twingo MkI (which I consider the last truly successful & segment-changing cheap car) are over, and the years of selling decontented Renault Clios have begun. Even the electric revolution is not immune, for the cheapest European electric car will soon be an ageing Renault Kwid with batteries strapped to the bottom! It is possible to make good, original design cheap, but even cheap design will almost always be more expensive than old design.

    1. “It is possible to make good, original design cheap, but even cheap design will almost always be more expensive than old design.”

      This is the essence of it, isn’t it? But I wonder if the answer to your question lies in my inclination to believe that somewhere between 1995 and 2000 was the point that the various parts of car development – refinement, quality, safety, performance, reliability – coalesced into a point that was ‘good enough’ for the overwhelming majority of ordinary needs even at the very bottom of the market. Take something like a second-generation Clio – this is, in European terms at least, the archetypal ‘as much car as anyone needs’ for 95%+ of private transportation requirements. Before the 1990s, you could make a decent case for a dedicated el-cheapo developing world variant in part because an old-generation cheap shed simply wasn’t up to the task. But when a cast-off 1990s (or even newer) design is still adequately functional for the design brief, is it any wonder there are no real clean-sheet designs? Fiat was probably the last to really try with the Palio (notwithstanding that the bones of the platform lay in the Uno), and they got burned with that attempt.

      I don’t doubt increasing regulatory burdens have their role to play too. If the tech in an old Renault has been amortised before it finds its way to a Dacia, it’s a hard ask to get consumers to pay equivalent or more if your clean-sheet design isn’t offering something at least as advanced as that baseline. And the more of your budget that goes to developing competitive baseline technology, the less there is for the rest of it.

  4. I always thought Ratan Tata had good intentions throughout. I just wish he’d reached out to PSA Group and bought the rights (or copied) the Citroën Mehari for his sub-continent wondercar.

    Somethings tells me a Mehari type open vehicle would have been far more useful and more suited to India’s back roads and farmland with it’s inherent multi-task loading ability? Perhaps cheaper to build too.

  5. From the description of the Nano’s brief (to be a cheap-enough substitute for a motorcycle), it was meant as a modern day Austin Seven, but in most respects it reminds me most of the 2CV. I am romantic enough to have really wanted to see the Nano succeed – I like the noble (if naive) intent of the concept and the judicious value engineering and design work which went into it. As others have described, though, a much lower risk approach is to leverage some one else’s redundant design and engineering – making the idea of Rover importing Indicas to the UK and reselling them as Cityrovers seem all the more quixotic.

  6. Good morning all. Despite his noble intentions, Tata was, I think, always on a hiding to nothing with the Nano. The Maruti 800 was a ‘proper’ car for not much more money (or the same money secondhand). That said, as an ancient design, it fared just as badly in crash testing, scoring zero stars in a Global NCAP test in 2014:

    In an alternative universe, where dedicated roads are populated exclusively by small and light speed-limited cars, safety requirements might be less onerous (although there remains the risk of crashing into something other than another car). As things stand it is becoming more and more difficult to make small cars safe enough to sell, which is why sub-B-segment city cars are a threatened species.

  7. I´m no expert in India but I suppose that rural roads are not exactly in perfect condition; those tiny 12″ wheels must be easily damaged at the first pothole, and in a car that will be frequently loaded with stuff, the lack of a rear hatch to access the boot is inexcusable.
    As a cheap city car the Nano is OK, but if the intention was to design a car to motorize rural India, I think it´s wholly inadequeate. That Lakh would be spent more wisely in an old pick up.

  8. Apparently, they were overly optimistic with the announced pricing and then failed to deliver. The subsequent ~80% (!) list-price increase, brought
    the product directly into a marketing conundrum, as pointed
    out in Daniel’s article. No model or concept would’ve
    commercially survived such an unlucky expectations-sensitive
    maneuvre, I’m afraid.

    Apart from this event, there were strong indications that
    it might turn out to be a huge success.

    Of course, bringing in a Mehari-clone (or a pared-down, decontented
    2-cyl. Visa, sans hatch opening, fixed windows etc …), would commercially work better, but they were obviously after making something truly great
    and memorable – which does not always work out. It takes certain global economic and societal preconditions, for such ultra-minimalistic automotive proposals to succeed – perhaps the ongoing
    reemerging of quadricycles’ does indeed reflect rather
    clearly the post-covid economic prospects,
    but that’s off-topic already.

  9. Yes, one may wonder why Tata developed such a vehicle to “provide mobility to the rural population”.

    I agree with the previous speakers that a copy of a Citroen Mehari would have been the better object.

    Putting aside all forms of chauvinism, there is a parallel between rural France (in the 50ties) and rural India (nowadays).
    And were the designers at Citroen so wrong when they developed the 2CV? I would say no.

    Of course, one must not ignore the fact that today’s population (or India’s in the noughties) already had higher standards for a vehicle than the French in the late 1940s.
    Based on these demands for an automobile above a motorbike, the Nano was indeed a catastrophic aberration.
    The fact that the sales price then almost doubled compared to the announcement would not be the real killer. The killer was simply what the buyers got for that price. A vehicle that suited and satisfied no one. The farmer got an egg on 12″ wheels with no load capacity. The upstart from a motorbike no prestige.

    I wouldn’t call this a heroic failure, this was a failure by default. A wrong concept at the wrong time.
    A concept like the 2CV (or Mehari) would probably have come at the wrong time in the noughties too, but at least it would have been the right concept.

    And to make matters worse, Tata just threw good money after bad with the retrofitted tailgate and other “improvements”.

    To think such a product would succeed in foreign markets like the EU is just hubris.
    – (The people of the EU have prevented any form of simple (mass) motorisation with their demands and the accompanying regulations – to avoid the word “forbidden”. ADAC and NCAP are the description of this. Or do you know someone who buys a new car and says “I bought it because I want to drive it into a wall at 60 km/h next week and nothing will happen to me because it has 5 stars in the crash test.” Does someone buy a car that they need to drive and transport and purposefully crash it? No. Today’s buyers only want to avoid that their own mistakes may remain without consequences. No one wants to take responsibility for their own actions any more. Seen in this light – and you are welcome to insult me for this personal opinion – it would have been more beneficial for road safety and the reduction of fatalities in road traffic to fit a metal spike instead of an airbag). –
    The Nano even with 1 1/2 or 2 1/3 stars would have not been sellable here.

    No, the Nano failed not because of its looks or its price, but because for whatever reason – arrogance? delusion? – the conceptual genius of a 2CV was not even remotely taken into account.

    1. Good evening, Fred. That’s a powerful and provocatively argued case you make.

      I do take the point that modern cars, with their (excessively?) high performance, hermetically sealed environment and all manner of non-driving related distractions, are not at all conducive to active safety, the primary determinant of which is the attentiveness and skill of the driver. Moreover, the ongoing arms race of ever bigger and notionally ‘safer’ vehicles makes it impossible to wind the clock back to a time of small and light minimal motor transport like the 2CV.

      Incidentally, motor vehicles were routinely fitted with the metal ‘spike’ you describe before the advent of the collapsible steering column!

  10. I’m with Fred on this – and can also honestly say that NCAP ratings have never yet entered my mind when buying a car. Having said that, I have no quarrel whatsoever with the principal of designing machinery in such a way that it is safe to use. What does offend me deeply is the abdication of responsibility for one’s own actions and behaviour which seems to be the guiding principle in what is now considered to be right and proper. It’s wrong, muddle-headed and will end in tears. Or as Private Fraser so rightly observed, “We’re all doomed….!”

  11. “The wheels were fixed with just 3 studs”.

    As indeed they were on my 1981 Peugeot 305S.

    1. Hi Peter. Three-stud wheel fixing was something of a French tradition. Even larger Renaults like the 16 and 18 had them:

      Although (fact of the day coming!) post-facelift examples of the 18 switched to four-stud fixings:

    2. Indeed, the three stud wheel fixing was something of a French tradition in days gone by. The odd thing was, it doesn‘t appear to be purely for cost reasons. My 305 was fitted with ruinously expensive Michelin TRX wheels and tyres.

  12. I think this 4 or more studs for wheel fixing is a typical German thing. Remember the Beetle in the 50s and 60s had 5 studs. 34 hp, give me a break. What a waste.
    In other countries the engineers just did what was appropriate for the situation.

    1. My old grannie (a bit of a pioneer in her day) always used to say that although three were plenty, the reasoning behind having four studs dates back to a time when coarse-thread (Whitworth) wheel nuts had a tendency to work loose, allowing a wheel to escape. Usually losing the wheelnuts in a water-filled ditch in the process. Having retrieved the wheel, it could be re-attached with three nuts, by borrowing one from each of the other wheels, and progress could resume…….

  13. Yes, I have thought for a long time that cars are too safe and make people feel invincible. I suspect that cyclists/ horse riders/ motorcyclists* probably make the safest car drivers as they are used to been vulnerable on the road and so drive accordingly; I like to think.

    Presumably many people buy the safest car they can find in order to protect themselves from the carelessness of other road users and then drive carelessly themselves, thus perpetuating the problem. The believe that “Myself” drives safely unlike everyone else probably explains those passive aggressive “Baby On Board” signs you used to see (Do what you like to other road users, just make sure you only crash into me gently). This attitude also causes a social rift because people who cannot have or choose not to have a car therefore travel on much more vulnerable forms of transport. Bus passengers get no seatbelts, no airbags and are protected from a side impact by a layer of metal, some insulation fleece and some form of laminated “Formica” board.

    We have just returned from holiday in the East Riding- our last without a car as our Mazda 3 awaits, I believe we will get 5 wheel studs incidentally- it was alarming to see how many motorists dodged the half barriers on the level crossing by the station when a train was due. This line- Hull to Seamer- was the site of a fatal level crossing derailment in the 1980’s and presumably local people still remember the great loss of life and yet for some…

    Something of this notion- that some motorists need to feel less at ease and cocooned- is creeping into road design by the deliberate creation of ambiguous situations: roundabouts that you can’t see over, the removal of road signs and give way markings so that no one has priority for example. This has reached it’s logical conclusion on Exhibtion Road in London where the bit from the Royal Geographical Society down to the Science Museum now makes no distinction between road and pavement.

    In my world the car regulations would mandate front fog lamps, ABS, and skinny a pillars. Any smart screen nonsense would have to be “Intuitive” and not distracting. Airbags would be approved… for passengers only.

    *I’m aware that some cyclists and mororcyclists do ride like numpties but that is Darwinism in action and most don’t. There are probably other vulnerable road users but it’s too late in the evening to think of them all

  14. Daniel, I can’t see much point looking at the Nano through European eyes. It wasn’t meant for that market. The Indian websites are far more succinct as to the reasons for the Nano’s abject failure. Here’s an example:

    https://bking.in/tata-nano-failure-case-study/

    Summarizing the main points (their spelling):

    Tata nano projects itself as the cheapest car.
    Nobody wants to drive the cheapest car.
    Buying a car is related to social status and prestige in society.
    Many nano catches fires. This creates a complete buzz in media.
    Despite the low price, everyone hesitates to buy because of the fire.
    They face tough competition from the 2nd hand market.
    People get high-end 2nd hand car at the same price.
    2nd hand car provides more facility at the same price.
    Tata motor stated that a 4-member family can easily be accommodated
    Bitter truth is its very uncomfortable for an Indian family.
    Up to 3 adult member it is ok only.
    Nano consumes 3 times as much fuel as a 2-wheeler.
    Requires space for parking, unlike 2-wheelers
    In India, a very popular phrase in society. “Low price means low quality”.
    Engine of some bikes are better than nano engine
    Faces difficulty in case of overloading.
    The nano cannot be driven on speed more than 70 mph.
    Small tyres of nano make it difficult to drive it on rough Indian road.

    Sums it all up, I think. The Nano was not very good in engineering terms. The MG Rover Indica CityRover shows how far off the mark Tata were when money was not the complete object. The company didn’t define their market for the Nano properly in the first place and design to those criteria, including the social ones. Price is not the only factor, the product needed to be aspirational and it wasn’t even close in that regard. No point dwelling on the fact that cheap wheels were needed in the marketplace — people didn’t like being reminded they weren’t all that well off to begin with. Better to design something half-decent, and then crow: “Look how good this is! Modern, up-to-date, designed and made here. And yet, we’ve got it down to an affordable price as well!” India is a caste and status conscious society, and pride of ownership is a significant force. Probably just as well, on the whole, that Tata left JLR to get on with it after purchase.

    1. To all DTW contributors: In future please refrain from writing articles about vehicles if you cannot write about them through the relevant indigenous eyes. If you are for some reason unable to obtain a pair of indigenous eyes, please let me know and I will attempt to obtain some for you. (I hold a stock for such eventualities).

      I also have a part-share in a time machine, which can be employed when dealing with historical subjects.

      Kindly, The Editor.

  15. I was last in India nearly 20 years ago, so long before the Nano reached production, but rural roads are typically narrow, chaotic, and full of slow-moving traffic (and cows). The Nano, being small, light and with decent visibility, seemed well suited to its intended purpose… although it would be stifling without any ventilation in much of the country for most of the year.

    And yes, its performance in crash tests was poor, but the consequences of two or three people coming off a motorbike at any speed are far worse.

    I think ‘heroic failure’ hits the mark quite well.

  16. Miniaturization beyond a certain point invokes costs that must be considered.

    I do like the original Mini, so I don’t want to demean it, but let’s not ignore the obvious. It was never a 5 star crash safety car, and it never generated huge profits (any profits?)* for Austin-Morris, BMC, BL. A theory is that any cheap small car aimed at the rural market needs to have a wheelbase greater than 90″, else it must be marketed as a chic city car (not sure if it applies to Kei cars and Voitures Sans Permis) and priced accordingly. Even so, profitability will be an uphill climb (Smart Fabergé Egg, Toyota iQ**, Up!)

    Is this not a law of nature, are there any exceptions? Was Ratan Tata affected by hubris, or a naive lack of due diligence?

    * Do I need to document this assertion?

    ** It’s probably time to stop scoffing at the Cygnet, now fetching at least 150% of the original asking price (and rising).

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