It was the price that caught everyone’s attention. Prior to the development of the Nano, cars were big-ticket items, symbols of luxury and aspiration, indicators of status and position. It was the image of a family perched precariously on a two-wheeler that led Ratan Tata, the chairman of Tata Motors, to consider manufacturing a car priced around Rs1 lakh, an automobile that could provide safe transport to India’s middle class.

 

The announcement that Tata Motors would manufacture a low-cost car created unprecedented excitement, with ordinary people, automotive companies and the media everywhere speculating about the shape and nature the vehicle would eventually assume. Critics sniggered that it would be impossible to make the car at the price that had been set.

 

And so began the challenge that galvanised Tata Motors into action. “The chairman put the idea before us and then the thinking process started,” recalls Narendra Kumar Jain, general manager (engines) at the company’s Engineering Research Centre (ERC) in Pune.

 

Engine trouble
The Nano development team was divided into a number of engineering excellence centres, and each was given cost targets within which to work. With the engine as the aggregate, the boundaries included the exhaust system, the cooling system, the intake system and the fuel system. These had to achieve acceptable performance criteria, be economical on fuel consumption and comply with tough emission regulations.

 

“Our first thought was to purchase the engine from an external supplier,” says Mr Jain. “The sourcing team was given the task of sourcing the engine. Unfortunately, none of the over 100 suppliers that were contacted could meet our cost target. They were at least 50 per cent higher than our target.”

 

There could be no compromise on cost and that’s where the team encountered its first hurdle. There seemed no way to break the impasse until ERC came up with the idea of designing and manufacturing the engine in-house.

 

The task was delegated to Mr Jain’s team, consisting of Mangesh Nimbalkar (performance and durability development), T Sethuramalingam (calibration and vehicle emissions), Hemant Malekar (design) and Kedar Gokhale (design for suppliers’ parts). All of them were leaders in their own fields and headed teams of other skilled people.

 

Smoothening the drive
Even as the team set out to tackle the challenge, doubt arose. Some of the people on the team were afraid about what might happen if they failed to achieve their objectives.

 

Mr Tata was quick to reassure the team members that if they failed they should not feel bad, since no one had done what they were setting out to do. He added that he felt sure that if anyone could pull off the task, it would be this team. The words acted as a great morale booster to the team. There was renewed commitment and enthusiasm.

 

“We decided not to use the classical approach of downsizing the technology as it exceeded our cost target by approximately 50 per cent,” says Mr Jain.

 

The development of a one-cylinder engine, as is used in an auto rickshaw, would have helped the team adhere to the budget. Yet they consciously chose to develop a two-cylinder engine. “We made a concept vehicle with a one-cylinder engine and test-drove it,” says Mr Jain. “Then we realised that it would not offer a smooth and comfortable driving experience.”

 

The team began working on the concept design of the engine. The first design was for a 538cc engine that could deliver 16hp. The plan at that time was not to exceed 20hp, thereby fitting in the budget. “With some modifications, we could have had 18hp,” adds Mr Jain. “We made an engine that cost us approximately 40 per cent more than our target. But we believed there was scope for improvement. So we went back to work.”

 

Subsequently, the team made another design, with a 554cc engine that could deliver 26hp. A third upgraded version consisted of a 586cc engine which could deliver 31hp. The improvement enhanced the confidence of the team members. They had managed to double the power while maintaining the cost. It was now time to make a full-fledged design.

 

Optimising costs
The chairman was pleased with the efforts put in by the team. Encouraged, the team worked on lowering costs and improving the performance further. The team refined its efforts and brought out a 624cc engine that could deliver 33hp. At the time of detailed designing, the cost was brought down to just 30 per cent more than the set target.

 

In 2007, Tata Motors manufactured 15-20 cars at these specifications. The development was a vindication of all the efforts put in by the team. The driving experience had improved, convincing the management and the operating teams that they were on the right track.

 

Even as the engine team and others in the company concentrated their energies on fine-tuning their work, critics within and outside India declared that Tata Motors would never meet the emission regulations. In reality, the Nano was already fit to comply with BS-III norms in December 2007, when only 13 major cities in India were required to be compliant with this standard. The rest of the country was still adhering to BS-II norms.

 

It was a time when any additional improvement would have meant a huge increase in costs. And yet, in December 2007 at the chairman’s behest, the team got ready to equip the car to comply with BS-IV norms. Considering that a large part of the country had embraced BS-III emission norms only in April 2010, when 13 major cities switched to BS-IV, this was a huge achievement. Currently, the car meets BS IV emissions and can be upgraded to Euro-V and BS-V with minimal modifications.

 

The commencement of the production phase brought down the Nano’s cost further, from 30 per cent higher than the target to just 15 per cent over it. As volumes increased, the cost could be reduced further. Meanwhile, the team continued to research ways to get better. By the time the car was launched in March 2009, they had managed to develop a 624cc engine that could deliver 35hp.

 

Alongside, the fuel economy was improved. Starting with a fuel economy of 18kmpl (km per litre), the team improved it further. “When we got the vehicles certified, we had achieved a fuel economy of 23.6kmpl under standard test conditions,” says Mr Jain. “This is very important from the middle class point of view. Buying a car is one thing but fuel economy is equally important.”

 

The beauty of the Nano’s engine is that it has become a benchmark on cost, triggering low-cost product development across the global automotive industry. It also has the potential for application in other vehicles.

 

Despite having wowed the world, Mr Jain and his cost-busting colleagues are not about to sit on their oars. Having filed seven patent applications and one design application, they are continuing with their efforts to make the Nano better still.