Production linked incentive scheme to be expanded to AC, furniture, leather sectors as MEIS wound up – Moneylife

Updated at 4.45pm on 5 August 2020 to add clarification from Tata Motors.

The 15th of January 1998was a red-letter day in Indias automotive history. On that day, at New Delhis Pragati Maidan expo grounds, several new cars were launched; but the, but the car that really grabbed the headlines was the Tata Indica, Indias first home-grown 'peoples car.' Even if all knew that the new Tata car that would be as big as a Maruti Zen, yet provide the space of an Ambassador, at a price of a Maruti 800, was going to be called the Indica (like in India+Car), they still hadnt seen the car.

Thus, the unveiling of the car was a much-awaited moment. Sure enough, expectations ran high and, at the unveiling, which had thousands of journalists, politicians and spectators crowding the huge Tata stand at Hall 11 of Pragati Maidan, the car did not disappoint. Here was a car that did deliver on the promise of space and size and in a package that was, indeed, good-looking.

The Indica was launched in the Indian marketplace by the end of 1998, as Tata had promised, and initial bookings (about 115,000) and expectations were huge for a car that, though priced more than the Maruti 800, was still markedly cheaper than the smaller Maruti Zen. Sadly, early quality problems blunted that enthusiasm for the Indica; and, over the years, the reputation of the car and the car making abilities of Tata Motors took a downward spiral.

Exactly 10 years later, almost to the day, on the 10 January 2008, Tata Motors regaled a thousand-odd spectators at Hall 11 of Pragati Maidan, once again, with the dramatic unveiling of the Tata Nano. The 'most expected' car in the history of the automobile in India had lakhs thronging to Hall 11 at Pragati Maidan, which remained crowded and jam-packed through the rest of the Expo. Outside, the eager crowds reminded you of a cricket stadium before a one-day match. Hundreds of security men formed uncompromising barricades with thick ropes.

By 16th January, the last day of Delhis ninth motor show, some 1.8 million people had thronged the Expo, comfortably beating the Paris motor shows record draw of a million-and-a-half, just to get a glimpse of the Tata Nano, the car which had grabbed headlines across the globe. They came in their thousands, from Delhi, Haryana and UP, riding cars, buses, even tractors and tongas, setting off traffic snarls that stopped Delhi at several places.

For what everybody had gathered to see at Hall No 11 in Pragati Maidan was not just another small car, but to see hope emerge on wheels. For this 'lakhtakia' car, in Hindi meaning 'the one-lakh rupee' car as the man on the street had already named it had enabled millions to dream of a life beyond the motorbike, of a life that would be safer and more comfortable for themselves and his (or her) dear ones.

Less than two years later, a few months after the Tata Nano went into production, that dream came to a fiery end, as a few of the Nanos self-ignited inexplicably, and as the image of the 'cheapest car in the world' hardly helped find it buyers who could be proud of the car.

In both cases, Ratan Tata had the right vision, the right idea, at the right time. And the Indian consumer and public were more than ready and happy to buy Indian and make the country proud. Yet design, engineering, and quality shortcomings each time had the consumer rethinking. These quality issues were eventually addressed, but years after the cars were launched. By then, the damage had been done.

Both the Indica and the Nano projects were developed at less than $400 million each peanuts in the international automotive development scale of things. But that was one of the main problems in chasing the objective of 'frugal engineering,' as well as making a car 'for Indians, by Indians,' quality was compromised every time. Also, the hubris of the engineers and designers once the Nano had grabbed headlines worldwide, knew no bounds.

The consumer wants the best product that their money can buy, and they do not care whether it was designed by Indians or by people from another part of the world. On the contrary, Indians would be more assured if the cars were, indeed, designed by Europeans.

Finally, it was the attitude of developing in a penny-wise-pound-foolish way, as well as the obsession to do things in India with Indians, that has brought Tata Motors down to its knees, whence it's up for grabs, and will, in all likelihood, be grabbed by the Chinese. Is this the end of Indias car making story?

UPDATE:

"In March 2020, Tata Motors had announced the intent to subsidiarise its PV business as the first step towards securing mutually beneficial strategic alliances that provide access to products, architectures, powertrains, new-age technologies and capital. Securing a mutually beneficial alliance is a priority. However, it is not an imperative for today but an opportunity to be secured for tomorrow," the company statement says.

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Production linked incentive scheme to be expanded to AC, furniture, leather sectors as MEIS wound up - Moneylife

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