The Nano, as the world’s cheapest car, was meant to migrate millions of Indians from two wheels to four and prove India’s supremacy in frugal manufacturing just as Henry Ford’s Tin Lizzie had established the moving assembly line.
Tata, or RNT, as his executives like to refer to him, remains a guiding light for the group despite retiring at the end of 2012. He was the one who conceived the idea of the Nano.
His first doodle, of a car built around the humble scooter, was inspired by the sight of a family perched precariously on a scooter and trying to take shelter under a flyover in typically heavy Mumbai rain. The Nano, with its low price tag, would be the answer to their problems. Years before it came to be named, the concept of the car spread like wildfire as soon as Tata mentioned it in 2003. They called it the world’s cheapest car, or the Rs 1 lakh car, or - in Hindi - the lakhtakia gaadi.
Tata Motors had spent $400 million just on developing the little car, and then some on shifting of the manufacturing from Singur in West Bengal to Sanand in Gujarat. This also delayed the launch of the much-anticipated car by a year and a half. Tata Motors started work om the Nano in 2005, it finally hit roads in 2009. But what hurt the car more than the delay was its no-frills approach, forget stereo, air-conditioning, and power windows, it did not even have a glove compartment.
With that, customers became less tolerant of its little quirks such as the different sizes of the front and rear wheels. Add to this the rumours of Nano catching fire, and there was no way the car would ever live up to RNT’s expectations.
In 2012, RNT said that the car had immense potential in the developing world while admitting that early opportunities were wasted due to initial problems.
Six years down the Nano’s fortunes have not changed, rather it has worsened. It sells an average of 700 units every month, while the company maintains a monthly production capacity of 20,000 cars.
The dwindling sales figures triggered Mistry to attack RNT for his ‘dream project’.
In his 5-page letter Mistry said that Nano has no ‘sight of profitability’.