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New Delhi is filled with horse-drawn carts, bicycles, scooters, taxis, and private cars. As the growing Indian middle class demands more products once available only to the wealthy, the Nano, the world’s cheapest car, also has begun to appear on city streets.

The goal of the Nano was to convert consumers, especially those with families, from scooters to safer enclosed cars without increasing the price substantially. The Nano costs 100,000 rupees ($2000). To get to this price point, every component had to be scrutinized to minimize cost and the weight without sacrificing performance, comfort, or style.

At 1300 pounds, the Nano weighs less than half a Honda Accord. It also gets 56 miles per gallon, better than the Toyota Prius hybrid. Similar to a Volkswagen Beetle in appearance (and also with a rear-loaded engine), the Nano can achieve a top speed of 60 miles per hour, though it needs 23 seconds to reach that speed from a standstill. Naysayers thought such a car could not be developed, but the Nano went on sale at 470 outlets across India on April 9, 2009.

Tata Motors, the developers of this vehicle, ironically also has been struggling with a large debt load, due to its $2.3 billion purchase of Jaguar/Land Rover, the company responsible for two of the world’s most expensive cars.

Tata is limiting production of the Nano to 500,000 cars per year at a central manufacturing plant in India and using satellite factories to build components that can be distributed in “Nano kits” to independent entrepreneurs. These entrepreneurs then become primary dealers for the Nano. This form of outsourcing diverges from the standard supply chain model used by car manufacturers worldwide.

Discussion Questions:

Is the Nano a product that would work in every country?

Jyoti Thottam Pune and Niljanjana Bhowmick, “Nano Power,” Time, April 13, 2009.

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