India offers cheapest car on earth
E-Mail Article
Printer-Friendly
3-Column Format
Translate
Share Article
Text Size
MUMBAI: There was the $400 airplane seat that plummeted to $40. Then there was the $2,000 laptop reborn for $200. And now the $25,000 car has a $2,500 cousin.
Every now and again in business history, a disruption comes along that breaks the conventional wisdom about cost, tweaking and paring features once thought untouchable.
Likewise, the $2,500 car, scheduled for introduction Thursday by the Indian company Tata, swims against the current, with a rear-mounted engine, a trunk that fits little more than a briefcase, and plastics and adhesives replacing metal and bolts in certain nooks. (Some analysts expect the car to be priced closer to $3,000, still making it the cheapest on earth.)
But the still-untold story of how the Tata car was built is less about big-bang innovations than about a long string of $20 trims: a steering-wheel shaft rendered hollow here, a small headlight leveler removed there, the use of an analog speedometer less accurate than its digital equivalent.
The car is thus a triumph, not of one great invention but of a new engineering philosophy rising out of the developing world, with potential to change how cars everywhere are made, industry experts say. Just as Japan popularized kanban (just in time) and kaizen (continuous improvement), so Tata may export to the world what can perhaps be called "Gandhi engineering" - a mantra that combines irreverence toward established ways with a scarcity mentality that spurns superfluities.
Multimedia
Related Articles
Today in Business with Reuters
"It's basically throwing out everything the auto industry had thought about cost structures in the past and taking out a clean sheet of paper and asking, 'What's possible?' " said Daryl Rolley, the head of North American and Asian operations for Ariba, which provides parts for Tata and other auto makers like BMW and Toyota. "In the next 5 to 10 years, the whole auto industry is going to be flipped upside-down."
Low-cost cars are already having global impact. Tata's move, announced in 2004, has already inspired two rivals to plan their own ultracheap cars: the French-Japanese alliance Renault-Nissan and the Indian-Japanese joint venture Maruti Suzuki. Meanwhile, struggling Western automakers are increasingly borrowing from the cost-obsessed ethos of the developing world.
Yet it is unclear whether the Tata car itself, so small and wispy and lacking the most cutting-edge emissions and safety technologies, will ever drive a Western road - or whether it can sell briskly enough at home to reap a profit.
The "People's Car," so called in homage to Volkswagen's Beetle and Ford's Model T, is a carefully guarded secret. The company refuses to provide details of how it was built, and it has signed legal agreements with suppliers not to divulge details. But as the debut date approaches, a handful of suppliers broke their silence to offer an early, impressionistic picture of how the automobile, a machine invented by a 19th-century German, is being propelled by 21st-century Indians across a new frontier - to cost as little as the optional DVD player on the Lexus LX470 sport utility vehicle.
The handful of people who have seen the car describe a tiny, charming, four-door, five-seat hatchback shaped like a jellybean, tiny in the front and broad in the back, the better to reduce wind resistance and permit a cheaper engine.
"It's a nice car - cute," said A.K. Chaturvedi, senior vice president for business development at Lumax Industries, a supplier in Delhi that developed the headlights and interior lamps for the car.
Driving the cost-cutting were Tata's engineers, who in an earlier project questioned whether their trucks really needed all four brake pads or could make do with three. As they built the People's Car, for about half the price of the next-cheapest Indian alternative, their guiding philosophy appears to have been one question: Do we really need that?
The model appearing Thursday has no radio, no power steering, no power windows, no air conditioning, and one windshield wiper instead of two, according to suppliers and Tata's own statements.
Bucking prevailing habits, the car lacks a tachometer and uses an analog rather than digital speedometer, according to Ashok Taneja, who until recently was president of the Automotive Component Manufacturers Association of India, representing many of Tata's suppliers as they signed deals with the company.
"So what if I'm going at 65 or 75?" Taneja said, referring to the use of a less precise speedometer.
The frugal method also pervades the car's internal machinery, invisible to consumers but perhaps with even greater implications for the vehicle's safety and longevity.
Latest News
