Why Tata Motors' Nano is going for a makeover

The call was unexpected. But when it came, Delna Avari had no doubt in her mind what her response would be. She moved from Bangkok to Mumbai, and from trucks and buses to little cars, "overnight". That was October 2010. Avari had spent the previous eight years doing short stints in different countries for Tata Motors' commercial vehicles division.

She was in Bangkok when Ravi Kant, who ran the company at the time, called. He wanted her to come back to India and join the Nano team. The vision for the Nano, said Kant, had not played out the way they thought it would. As understatements go, that was like calling a Ferrari a four-wheeled transport for two. The Nano was unveiled in January 2008, exactly 100 years after Model T hit the road and helped ordinary Americans drive every day.

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. However, the month Avari moved, the Nano sold a mere 3,065. It had crossed 5,000 only in four of the 16 months it had been in the market. Its installed capacity was 15,000 a month.

There would have been periodic increases in it. According to reports at the time, Tata Motors had spent $400 million just on developing the little car, and then some on setting up a new factory in Sanand, Gujarat to produce it. "When we were planning facilities for the car and working out a business plan, the business plan shown to me was looking at a figure of 200,000.

I said the figure is crazy. If we can do this, we should be looking at a million cars a year, and if we cannot do a million then we shouldn't be doing this kind of car at all," former Tata Sons Chairman Ratan Naval Tata said in an interview to the group website in January 2008, on the eve of unveiling the car and giving it a name. Between two stools 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. Avari, brought back to head the Nano project, had to be part of the team tasked with reviving its fortunes. She came amid inauspicious portends.


The next month, November 2010, the car plunged new depths by selling a mere 509. Didn't she come back to India kicking and screaming? "I was honoured," says Avari with a chuckle, something that is never too far from her countenance. "Anything for the Tata group." That last bit has to do with her lineage. Her father, like her, worked in Tata Motors, and mother in the group's insurance arm; her sister is with Taj, the group's hotel chain. "We are a Tata family." She is also a Nano owner, driven by her chauffeur, and refers to the tiny egg-shaped car as "the little one".