Tucked in between the noisy and newsy headlines in India in the last week around Love Jihad, Rahul Gandhi’s religion, Ivanka Trump’s costumes in Hyderabad and other inanities, was a poignant news bit about the Nano car. Poignant, because it said that dealers have stopped placing new orders for the car and in the month of October, just a measly number of 57 cars were shipped. And this led to political jibes from Rahul Gandhi that the PM’s pet ‘Make in India’ project just died. He also tweeted that Rs. 33,000 crore of tax payer’s money and that too of Gujaratis’ turned into ash. Coming in the midst of a vitriolic election campaign in Gujarat, one can excuse politicians for spicing up their speeches without looking at the larger picture. The point is taking potshots at Nano’s failure is taking potshots at India. Failure of Nano is not just a failure of Ratan Tata or the Tatas but a blot on India.
Cut to year 2008, when Nano was first launched, it was the biggest story of India Inc. ever. When Ratan Tata initially announced that Tata Motors is working on a Rs. 1 lac (US$2500) car, it was met with excitement and skepticism in equal measure. So, finally when Tata did launch the car with a price tag of Rs. 1 lac, the world did look up and notice. Finally, here was a car which was conceived in India, designed and developed by Indians with indigenous technology and manufactured in India that broke all cost frontiers unimaginable by car manufacturers till then. Overnight, Ratan Tata was the toast of the nation.
Around the 2008-10 time period, whenever I met any foreigner from Japanese to Americans, our conversations invariably touched upon the Nano car and how this was pulled off. And those visiting India always wanted to see a Nano car on the road and take a picture in front of one. Selfies didn’t exist then! The Chairman of a well- known Indian group who drove a Camry, proudly told me that he was the first among to book a Nano in Mumbai and to get delivery as well. At that time, Nano was yet to be seen in big numbers in Mumbai. But on a visit to Colombo in 2011, Nano had already captured the “Budget Taxi” space there. Media was full of interviews of not just Ratan Tata but also of the R&D engineers who had designed the Nano. Nano’s launch was the culmination of a series of stories in which India Inc. was part of then. It was believed that Nano would be a live case study for C.K. Prahalad’s “Fortune at the bottom of the pyramid” theory!
That was not be and the excitement around Nano soon started tapering. Unfortunate incidents of the Nano going up on flames on the road didn’t help at all. For a product which was expected to expand the car market by 65% or so, the sales was plateauing around 70,000 Units a year for 2-3 years before nose diving to what is a few hundred cars this year. The failure of the Nano car must be one of the most analyzed and discussed case study in B- Schools, I reckon. Most of what I have been reading, attribute its failure to the “positioning” of the car as the world’s cheapest car in the beginning. The Quality failures adding “fuel to the fire”. Attempts to re-position the car as a “Cool Urban car”,… didn’t help either. I have a different view on the reasons for the failure of the Nano car. But will keep that for another blog.
In business, they say there is no room for emotions and decisions need to be taken based on just commercial considerations. The ousted Chairman of the Tata Group, Cyrus Mistry recently said that during his time it was decided to pull the plug on Nano as it didn’t make commercial sense, after attempts to revive the project failed. As of now it hasn’t happened. The current Chairman Chandrasekhar has been more considerate, probably towing Ratan Tata’s emotional line. He has said that there is a need to take a more “holistic” view on the Nano project. And I tend to agree.
Nano was not a Tata story. It was and is an India story. Ergo, failure of Nano in a way is an indictment on the capability and potential of Indians. And as somebody said, “Nano was not an Idea. It was an ideology!” Ideas can fail. Ideologies need to linger! The failure of Nano soon opened up to “We told you so” and how can Indians pull it off” jibes. For a 3rd largest economy (GDP-PPP) in the world, India is yet to throw up globally renowned home ground brands. So far, it’s been the soft power brands like Ayurveda, Yoga, IIT and the likes which have been torch bearers for India globally. Let’s keep aside the Software brands like Infosys, Wipro,… aside for the time being. In one of my very early blogs (read here) on different styles of management, I had opined that for the world to recognise, acknowledge and adopt the “Indian style of Management”, we need stories of successful Indian companies and brands. Just like how the world adopted the American way or Japanese style when their companies were successful. And that opens the door for Indian companies, Indian products and we Indians in the global arena. Nano was uniquely positioned to be the 1st homegrown successful Indian product brand. There was an opportunity for India Inc. to have “arrived” in style. Not just that. Success of the Nano would have led to similar pushing of cost and design frontiers by other Indian companies in many other product categories. It would have opened the floodgates for Indian CEOs to apply the “frugal innovation” concept in other products. Hence my fervent hope that Nano should succeed.
So, when it failed as it has now, it has pushed back the India Inc. story by few years till we stumble upon the next Big Idea. In the meantime, Nano I believe, is slated to make a comeback in an electric avatar. Will this avatar help Nano to claim the position of “the common man’s car” in Indian market that Ratan Tata originally envisioned 9 years ago? The world in no longer watching it with the same excitement of 2008. Away from the arc lights, the original billion dollar opportunity still beckons!
A quote alluded to Ratan Tata says, “I don’t believe in taking right decisions. I take decisions and make them right!” Nano might have been a glaring exception to this. For Ratan Tata’s sake, Nano-II should set the record straight. For India’s sake too.