Wheels of Fire: The Burning Issue in Tata Motors
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DREAMS GO UP IN SMOKE This brand new Nano burnt down in Mumbai as it was being driven home from showroom
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y all accounts, March 21 was an uneventful muggy Mumbai summer’s day. Steaming traffic jams were spread thickly over the city roads. Most people were sweating it out in BEST buses. Nutan Sawant was not one of them. That day she was in a car. For as long as she could remember, she had travelled on those lifelines of Mumbai: Local trains and buses. And then in October 2009, her husband Satish heard about the launch of the Rs. 1-lakh people’s car. “Last year after Diwali, I thought we could afford a small car,” he says. He was so keen that he jumped the queue by paying Rs. 15,000 to a Concorde Motors employee. March 21 was when they had to collect it. Satish and his wife went to the Concorde showroom at 10 a.m. Since Satish didn’t know driving, Concorde arranged for a driver. It was a great feeling for Nutan and Satish. They relaxed in the spacious rear seat as it glided through the tree-lined roads of Prabhadevi. They had travelled 15 kilometres when Nutan sniffed, turned towards Satish and asked the Rs. 2.26-lakh question: “Do you smell something burning?”
Satish was unsure. More so when the driver said a new car could have such a smell. They travelled a bit further and still the smell wouldn’t go away. Nutan again expressed her concern. When Satish or the driver did not pay any heed, she ordered the driver to stop the car. A biker passing by drew their attention towards the rear part of the car. The Sawants and the driver got out to look and saw smoke first and then fire. Satish or Nutan don’t quite remember the exact sequence of events except that in 15 minutes, the entire car was completely gutted. Sawant called Concorde. They towed the car away. The police, too, turned up but were unsure of what complaint to register. The Sawants returned home by 2.30 p.m.; without the car of course.
The Dark Edge of a Dream
Take the image of a burning Nano and put it next to the image that actually gave birth to the idea of Nano. One version (now declared apocryphal) says Ratan Tata saw a family of four on a bike in pouring rain and decided to come up with a car that cost less and carried more.
The target sale price of the car was Rs. 1 lakh, less than half of the price of cheapest car available in India and indeed anywhere in the world.
To make sure that the promise was kept, Tata Motors turned on the innovation tap. The engineers at Tata Motors questioned everything. The result was a fresh new design. The engine went to the rear and the petrol tank in the front. A lot of fibre and plastic was used instead of steel to keep the weight of the car low.
The nearly 100 vendors all understood the design to deliver the goods. The approach worked.
Ratan Tata announced the car in New Delhi Auto Show in January 2008, the news of the $2,500 car spread right across the world. The publicity buzz rivaled that of any of Apple’s products. The potential was huge. The Nano can add Rs. 1,000 crore, or about 3 percent of annual revenues to Tata Motors, says analyst Vaishali Jajoo of Angel Broking. It will also fit in with global ambitions of the company which has already planned to launch Nano in Europe in 2011.
All that this car could achieve hangs in balance because of the fire in Sawant’s car. Now this isn’t the first time that cars have caught fire in India. But so many cars of a model in such a short interval are worrisome. Just seventeen days after the Sawant incident, on April 7, another Nano caught fire on the National Highway 8 near Anand in Gujarat. These incidents are worrying the customers about the safety aspect of Nano. Tata Motors dealers who spoke to Forbes India said these customer concerns were straining the dealer-company relationship.
One way Tata Motors could soothe customer nerves is to recall all the vehicles sold till now, fix the problem and then re-release the product back in the market. Now that’s an ethical dilemma. In India, a full-blown recall would just hurt the brand very much.
Anyway, there are no regulators for this kind of thing in India. India needs a full-fledged organisation like the National Highway Traffic Safety Administration (NHTSA) in the US that examines the cause of accidents and establishes better safety norms, a senior manager at a global firm says. “We regulate many other things so well. Why not auto customer safety?”
Tata Motors, for now, is busy investigating. “We are conducting our investigations which will be completed soon,” says a Tata Motors spokesperson. Since the Nano is a marquee and highly sensitive project most people — insiders, suppliers, ex-employees, competitors — who spoke to Forbes India did so on the condition of anonymity. Tata Motors itself chose to respond to our questions via an email.
The two recent fire incidents have come as a bolt to Tata Motors that had all along believed the fire problem had been sorted out last year itself.
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