Brand Relevance: Making Competitors Irrelevant - always yours

MARKET DYNAMICS IN THE AUTOMOBILE INDUSTRY 117
a casual estimate to the press of what it might be possible.
This rather arbitrary estimate became the target for the design
team. In addition, the team was charged with generating a
design that would satisfy pollution and safety standards and
achieve performance targets with respect to fuel effi ciency
and acceleration.
An intense focus on costs, based in part on restricting features
to “ essential ” as opposed to “ nice ” and in part on sheer
creative innovation, dominated the effort. Among the saving
ideas were having only one windshield wiper, putting the
instrument cluster in the middle of the dash so it would work
for a both left and right - side drive, having common handle
designs on each side, and designing a simplifi ed engine - control
computer with reduced sensors and functions. A mock - up
of the car with its innards exposed was a centerpiece of an
engineering team who were daily looking for ways to simplify
and reduce costs. Tata did not do it alone. The suppliers
were an integral part of the team and were the source of key
cost - reduction approaches — over forty suppliers set up plants
adjacent to the Nano plant to reduce logistics and inventory
costs. The effort was global. The in - house design team was
supplemented by an Italian - based design fi rm and the engine
management systems was created by a supplier headquartered
in Germany. In addition, government subsidies were obtained
for building factories.
The Nano was able to leapfrog the Muruti 800, which was
a popular four - passenger car in India. The Nano was much less
expensive, however, and even had 21 percent more interior
space because of its headroom, despite an 8 percent smaller
exterior. It also scored high on fi t and fi nish, and the deluxe version
had many amenities, including air conditioning.
The Nano promised to greatly expand the market by bring
automobile ownership to people who otherwise could not afford
it — 65 percent by one estimate. As a result it would obtain sales
from new segments besides having an impact on sales of existing