The Indian Tata Motors Group has revenues of around 20 billion euros. It has just unveiled the world’s cheapest car, the Tata NANO, at a car show in India’s capital Delhi. At the same time, it's trying to buy the traditional luxurious Jaguar and Land Rover brands.
The new Tata NANO
Jamshedpur is nicknamed the Steel City of India. It is the cradle of the Tata concern, which is now more than 100 years old and has since become a global player. This is where Tata’s CEO Ratan Tata allegedly conceived the idea of a new people’s car when he saw a family of four riding on a motorbike. He concluded -- we need a cheap family car for less than 100,000 rupees (approximately 1,700 euros).
Tata Motors’ triumphant history began more than 50 years ago when the company started to produce lorries in Jamshedpur, in co-operation with Mercedes Benz. Today, Tata Motors is one of the world’s top manufacturers of lorries and buses.
"We have always had a history of pioneering -- we pioneered India’s steel industry almost a hundred years back. We also started India’s first chain of luxury hotels and we introduced India’s first indigenous passenger car," summarised the concern’s manager N K Dutt.
"And as our chairman says," he added, "either be the number one or two in the business -- or get out of the business."
Goods such as lorries or steel still make up the core of Tata’s production. Nevertheless, the concern’s diversity is quite unprecedented. Its nearly 100 companies sell everything from tea, porcelain, computer software and telephone and satellite connections, to watches.
The company also offers excellent social benefits to its employees, according to Tata’s steel trade union secretary S. N. Singh: "We don’t believe in strikes and lockouts, we believe in negotiations across the table. Since 1956, we have had an agreement, and by that agreement, till today, we have found all the solutions while sitting together. We take time."
The current CEO of the family enterprise, Ratan Tata, has driven the modernisation and globalisation process. He has expanded Tata's operations to over 80 countries. He bought the legendary English tea brand Tetley and European steel giant Corus. He is currently bidding for the traditional Jaguar and Land Rover brands.
"History will say whether we were courageous or whether we were foolish," he once said about Tata Indica, the first car to be completely developed and manufactured in India. It was ridiculed at first but it later became a great success.
Dilip Chenoy from the Society of Indian Automobile Manufacturers has high expectations regarding the new Tata NANO model: "The new Tata will set new benchmarks and challenges and create new opportunities for the automotive industry."
Targeting the middle class
The main target group for the new Tata NANO, which costs just under 100,000 rupees, is the emerging middle class in the country of 1.12 billion inhabitants . Until now most people could only afford to motorbikes. At first, 250,000 vehicles a year are scheduled to be manufactured going up to a million in the future.
Dilip Chenoy said that experts also expect the vehicle to become popular in other emerging markets and developing countries: "Companies based in India need to survive and they cannot survive on the Indian market alone. You have to have an international footprint."
But sceptics doubt whether the light and simple people’s car will be able to make it in countries with higher security and environmental standards than in India.