Tata Nano: The Secrets of the $2,500 Car
February 15, 2008

By Nick Kurczewski

NEW DELHI, India -- Tata Motors created automotive history at the New Delhi Auto Show in January when the $2,500 Nano hatchback rolled onto the stage. Ratan Tata, the soft-spoken chairman of Tata Group and Tata Motors, said the Nano’s first mission is to move India’s scooter owners into the safer, cleaner and more comfortable world of four-wheeled motoring.

But even more incredible than the car’s rock-bottom price is the fact that, underneath the Nano’s cute jellybean shape, there are no hidden tricks or bizarre cost-cutting measures.

How exactly has Tata kept the Nano’s price so low? The answer isn’t nearly as complex (or draconian) as many automotive experts predicted.

A Hard Outer Shell

One big surprise is the Nano has an all-steel body. Many automotive analysts predicted the car's outer panels would be colored, injection-molded plastics, to eliminate the cost of a paint job. Instead, the Nano uses a simple welded-steel platform and steel body panels.

Another rumored cost-cutting measure was that Tata would follow the lead of Lotus Cars and use an aluminum-extrusion frame held together by industrial-strength adhesives to reduce weight and cost. But no. The Nano employs normal welding techniques.

Size Matters

At a little more than ten feet long, the Nano is nearly 20 percent smaller than the next smallest car sold in India, the Maruti 800. However, the Nano also manages to have 20 percent more interior space than the Maruti. Less weight and fewer parts mean less raw material and lower cost.

The Engine: Smaller Is Cheaper

As simple as that sounds, it couldn’t be truer when it comes to cars. The Nano’s light curb weight allowed Tata’s engineers to use a much smaller engine while still achieving performance acceptable to drivers in both congested urban areas and quiet rural markets. The Nano has a rear-mounted, 623 cc two-cylinder engine. Ultimate power is only 32 horsepower, and the top speed is said to be around 50 miles per hour.

The Transmission

What happened to the continuously variable automatic transmission? The fact that the Nano has arrived with a four-speed manual transmission was a minor shock. A CVT is compact, simple, and makes excellent use of available engine power. Those are important points when producing a small car with limited horsepower. Our guess is the CVT automatic could appear in the near future and for a slight premium over the base model.

Plenty of Patents

Much has been made of Tata's 32 patents pending for the Nano. Yet during a news conference at the New Delhi Auto Expo, Ratan Tata pointed out none of these is revolutionary or represents earth-shaking technology. He said most relate to rather mundane items such as the two-cylinder engine’s balancer shaft, and how the gears were cut in the transmission.

Plants and Partners

There is no escaping the importance of low labor costs in Nano’s $2,500 base price. But Tata Motors’ new plant in Singur, West Bengal, is far from completion and has not been without controversy. Many farmers continue to complain they were forced off their land to make way for the new factory. Barring any further delays, the Singur plant should be churning out Nanos toward the latter half of 2008 and reach a production capacity of 350,000 units per year.

Ratan Tata does not rule out the use of satellite plants around the world — most likely in Africa, the Middle East and Southeast Asia. Tata Motors has also ensured that parts vendors are located close to the Singur plant. The Hindustan Times reports tough competition forced the parts suppliers to keep their prices down, and this has helped keep the Nano’s price to the promised “1-lakh” ($2,500) level.

Take Out the Options

Tata wasn’t letting anyone slide behind the wheel of the Nano show cars in New Delhi. But we managed to snap some photos of the car’s Spartan interior. As you’d expect, there isn’t a whole lot to see. The gauges are in the middle of the dashboard — making the switch from right- to left-hand drive that much easier — and there is no radio.

The dash itself looks to be one huge single mold of grey plastic. The seats aren’t exactly what we’d call richly padded, though they look durable enough. Air conditioning and alloy wheels are available on the pricier “deluxe” models. For now there are no airbags, though Ratan Tata said these could easily be added at a later date.

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