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Ultra low cost car

  1. ULTRA LOW COST CARS Presented By - Chandan Nagaraja
  2. What is ULTRA LOW COST CAR..? • Ultra low cost car segments costs between $2,500 to $5,000 (€1,750 to € 3,800) or less than $5,000. • It has basic components and needs required by the car. • Ultra low cost car is targeted to lower middle class, whose income ranges between $2,000 to $5,000. • India and most of the developing economies is thickly populated with lower middle class people.
  3. Automotive Examples - History Ford model T in 1908 20 hp Original Cost = $850 ( Equivalent to Today‘s market value = $20, 700) VW Beetle in 1956 34 hp Original Cost = $ 1,995 ( Equivalent to Today‘s market value = $ 12, 333) Austin Mini in 1961 24 hp Original Cost = $ 2,100 ( Equivalent to Today‘s market value = $ 12,900)
  4. World‘s First Ultra Low Cost Car – Tata Nano  In 2008, Tata Motors from INDIA launched NANO car  World‘s cheapest car  Cost = 1 lakh Indian Rupees (€1750 , $2,500)  Stylish, comfortable  Fuel-efficient engine (23-25 Kmpl), 33hp  Meets all safety requirements  Environment-friendly  Popularly it is hailed as the “People’s Car”
  5. An idea can make billion people Smile.
  6. Seeds of the Dreams. I observed families riding on two-wheeler the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby. It led me to wonder for such a car which is safe & affordable to any Middle class family. Mr. Ratan Tata Problem
  7. TATA NANO – Dream – Criteria and Success  [Dream] - ―It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family”  [Criteria] - ―Tata Motors‘ engineers and designers gave their all for about four years to realize this goal. Today, we indeed have a People’s Car, which is affordable and yet built to meet safety requirements and emission norms, to be fuel efficient and low on emissions‖  [Success] - ―We are happy to present the People‘s Car to India and we hope it brings the joy, pride and utility of owning a car to many families who need personal mobility.‖
  8. The ONE lakh car that drives ONE billion dreams…
  9. Why do we need ULCC…?  According to Statistical data and analysis, most of the indicator points to an Automotive industries is in recession, especially after 2008 global financial recession. Automotive leaders should balance between global financial crisis and future market demand.  Industrial consolidation and restructure in global market will accelerate, however it is propelled by the lack of availability of capital and consumer financing, high fuel costs and low consumer confidence.  Undoubtedly, a new and improved automotive operating design model will emerge from this crisis, facilitated by ―New Innovation‖ and ―Low Cost Solution‖ to serve the demands if a broader market of consumers.  Perhaps, the launch of Ultra-Low Cost Car segment is the Answer for current crisis. ULCC marks the beginning of new era in automotive industry and redefining the competitive landscape for the entire industry.
  10. Features Length 3.1 meters Width 1.5 meters Height 1.6 meters Engine All-aluminium, Rear Mounted, Rear Wheel Drive Capacity 623 cc Power 33 PS Fuel Injection Multi Point Fuel Injection (MPFI) Fuel Type Petrol, Diesel Version will be later Body Type Sheet Metal Seating Capacity 04 (Four) Mileage 20-22 Kmpl (City drive) 26 Kmpl (Highways) Top Speed 75 K.M Emission Norms Euro-IV, Bharat Stage-III compliant Safety Norms Frontal Crash Tested Versions One Standard and Two Deluxe
  11. SWOT Analysis: • It‘s nearer competitors Bajaj Auto are ready to introduce ‗cars‘ less than the price of ―NANO‖ • No regular size luggage room. • No modern ABS, ESP systems • It can capture the large market in the society, i .e. ―Middle class‖. • Cheapest car in the World. • 21% more space than Mruti800. STRE NGTH OPPO RTUNI TIES THREA TS WEAK NESS
  12. The Global Sale Forecast for Ultra Low Cost Car
  13. Perspective Customers in India
  14. Low-cost cars are selling in advance and emerging markets
  15. Top Ten Customer‘s Pocket Friendly Cars in the World NAME OF THE CARS PRICE COUNTRY 1. Tata Nano: 4-door $2,497. India 2. Chery QQ: 4-door hatchback $4,781 China 3. Suzuki Maruti 800: 5-door hatchback $4,994 India 4. Geely MR: 5-door $5,500 China 5. Geely HQ SRV: 5-door "tall" estate $5,780 China 6. Chery A-1: 5-door hatchback $7,340 China 7. Tata Indica $8,500 India 8. Hyundai i10: 5-door hatchback $9,096 South Korea 9. Fiat Palio: 5-door hatchback $9,242 Born in Brazil and sold in Most of Asia & America 10. Renault/Dacia Logan $9,477 Romania/Turkey/Ira n/Latin America
  16. Vertical view of the Current market The expansive potential of this market is commanding the attention of manufacturers and vendors worldwide, with a number of global players recently announcing strategies to enter or compete in the sector . General Motors, which produces the mini-car, Spark, in India, expects to introduce another low-cost car in 2015. Hyundai and Renault S.A.–Nissan have plans to produce a car for the low- cost car market. Skoda Auto, part of the Volkswagen Group, is investing in product development and plans to expand capacity in India. Fiat announced in August that it would market three models in China. A low price point and razor-thin margins— estimated at around 3% at the base model levels—will make hard-to-come-by profits easily susceptible to rising commodity prices, product launch missteps and market economics.
  17. Preserve and Protect or Participate and Prosper? • The dynamic and powerful ultra-low-cost car market is forcing manufacturers and suppliers to decide between two strategies. • The first is to preserve their brand and market positions and protect them against new market entrants, current competition and future price pressures. Established suppliers opting for this stance risk falling into the ―low-cost trap‖ between manufacturers and their new component standards and lower target prices. • A new set of low-cost competitors will emerge with the potential to enter mature markets and capture market share from the domestic suppliers, forcing existing participants to protect their positions. • The other choice for manufacturers and suppliers is to participate to capture share in the fastest growing segment of the industry and prosper by being leaders in developing the market. We believe first movers will have the opportunity to capture market share and build consumer loyalty.
  18. Then….., How to Approach to Ultra Low Cost Car Concept…….??
  19. Apply a Clean-Sheet Approach  Early movers on both the manufacturer and supplier sides have demonstrated that nothing less than a clean-sheet approach to product development and manufacturing can produce a vehicle that sells for less than $3,500. Tata Motors, for example, used this approach to develop the Nano, the world‘s least expensive automobile, by adhering to four guidelines .  Cooperate with suppliers.  Reduce the number and complexity of parts  Invent rather than Adapt - Tata Seeks 37 Patent Rights For Nano. The move is also expected to help Tata Motors to sell the car in markets such as Africa, Southeast Asia, Eastern Europe and Latin America - NANOVATION  Standardize at every stage of the value
  20.  The Tata Nano uses plastics and adhesives rather than welding.  Introducing the car with an artificially low price through govt-subsidies and tax-breaks, or using vertical- integration, or partially using inexpensive polymers or biodegradable plastics instead of a full metal-body.  It has no AC, no power steering, no power windows, no power bells and whistles, due to its low weight.  The car's exterior and interiors were designed at Italy's Institution of Development in Automotive Engineering.  The Nano's design implements many measures that make its manufacture cheap.  The Nano's trunk is only accessible from inside the car, as the rear hatch does not open.  One windscreen wiper instead of the usual pair (also seen earlier on certain Citroen and Mercedes models)  Three lug nuts on the wheels instead of the usual four and Only one wing mirror.  Radio or CD player is optional (the idea picked on some basic car models in North America)  No airbags on any model 624cc rear engine has only 2 cylinders.  No air conditioning in base model (as on most basic car models in Europe and North America)
  21. What makes it so cheap !
  22. Traditional Mind-set • ― Too risky‖ • ― Suppose it fails?‖ • ― Impossible. Never done before‖ • ― I don‘t see how that is possible‖ • ― Somebody must have already tried it.‖ • ― Too hard‖ • ― Ridiculous‖
  23. Question the Unquestionable • First time a two cylinder engine used in a car with single balancer shift. • Adhesives replacing rivet's. • Co-creation with vendors and suppliers. • 100 vendors co-located to plant • Innovative business model for automobile dealership. • Look to other industries for ideas: Seats from helicopter – light, strong, high vibration Dashboard and fuel lines from scooter
  24. ULCC is Driven By Innovation  Innovative technology  Innovative process  Innovative systems  Innovative delivery methods  … and more
  25. A ULCC on Europe‘s Roads? Probably. On North America‘s Roads? Probably Not. Three overarching factors will shape the ultra-low-cost car‘s future in both markets:  Emission standards  Safety Regulation.  Distribution • An luxury Nano concept car called the Nano Europa was shown at the 2009 Geneva Motor Show. • Tata Motor‘s has decided to launch in European market by 2015.
  26. The Strategy: What Works? What Doesn‘t?  Create entrance and growth strategy  Establish targets and make trade-off decisions  Align across functions and collaborate with suppliers  Measure of Creativity and Innovation  Benchmark the competition  Protect and preserve market positions
  27. Final thought….!!!!!! • One day the dinosaurs died, they died because they ate too much and occupied too much space and they were a burden on the planet or rather prevailing Jurassic era society. Then came the turn of the winged reptiles. The winged reptiles died to be replaced by the bird. • The Ultra Low Cost Car (Tata Nano) is the future of cars; Will it put an end to the dinosaurs, the Safaris, the Prada's, the Scorpio and so on?