Automotive News - April 14, 2008 - (Page 16D)

16D • APRIL 14, 2008 INSIGHT Tata Nano changes low-cost development Since the debut of Renault’s Dacia Logan, shown, many automakers have changed their methods for developing ultralowcost cars. The strategy used to be stripping features and manufacturing costs from previousgeneration products. Now the automakers are taking a cleansheet approach. Jesse Snyder jsnyder@crain.com NEW DELHI — The Tata Nano isn’t even on sale yet, but the $2,500 Indian car already has changed the rules on how to develop low-cost vehicles. The car was unveiled here in January. Interest remained frenetic during a subsequent media event at the Geneva auto show. Ahead of the unveiling, scoffers had predicted a car with no doors or a glorified pedicab. The substantial actual vehicle has global automakers changing their approach to developing low-cost vehicles, say sup- pliers and consultants. “The Japanese, Koreans and Europeans were all approaching emerging markets by taking content out of existing cars,” said Nigel Griffiths, director of international automotive research for Global Insight in London. “The Renault Logan showed them a unique design is possible, and the Tata Nano showed them how far that could go.” Clean-sheet approach Global automakers known to be developing an ultralow-cost car include Toyota, General Motors, Fiat, Suzuki, Renault and Nissan. All are taking a clean-sheet approach, suppliers say. Since Renault’s Dacia Logan debuted in 2004, many automakers stopped trying to appeal to pricesensitive markets by stripping features and manufacturing cost out of previous-generation products. “The Nano and the Logan are clearly not decontented programs,” said Richard Buitendijk, a U.K.based supplier analyst for CSM Worldwide. Drawing from those examples, other automakers’ new programs for low-cost vehicles are “taking a clean-sheet approach,” Buitendijk said. “Vertically integrated suppliers with a global presence see a real opportunity for sourcing in low-cost countries.” The incentive for manufacturers is clear: growth in a new segment. By 2020, the global market for vehicles priced below $5,000 will explode to 15.7 million units annually, or about the size of the U.S. new-vehicle market, from just 1.9 million this year, predicts the consulting firm A.T. Kearney. Tata Motors forecasts initial volume of 250,000 Nanos a year. But it is telling its suppliers to prepare for an eventual 1 million units annually, including 500,000 units assembled in markets that could include northern Africa, Southeast Asia and South America. Simplify Other manufacturers are studying and adapting the same approach that Tata Motors took to develop the Nano. Instead of decontenting, their programs for ultralow-cost cars slash costs by simplifying the product and manufacturing. But different companies’ development processes are not identical because each automaker has different needs, said Richard Butler, CEO of Caparo Vehicle Products in Birmingham, England. Caparo makes much of the underbody and internal structural stampings for the Nano and is working with an unidentified European automaker on an ultralowcost car. “Tata’s focus was on reducing weight and cost,” Butler told Automotive News. The approach of the other program is different, he said. “Cost comes in, but cutting weight and CO2 reduction come in more.” Tata involved more than 100 suppliers early in the process and worked closely with them to coordinate their efforts, said Girish Wagh, head of the Nano project for Tata. see LOW-COST, Page 16H The things that make our candidates unique also make them uniquely qualified. That’s why at Aerotek, we take the time to really know the people we place. To find the person behind the resume. We already know they can do the job, but are they the right match for the position? We need to know. Because at Aerotek, we only send one perfect candidate to fill one perfect opportunity. People. Fit. Perfectly.® Career Placement Spe cialists SM Offices Nationwide. Design Release Engineers Aerotek is an equal opportunity employer. An Allegis Group Company. © 2008 866.376.8350 Quality Engineers www.aerotek.com/automotive Manufacturing Technicians Production Supervisors http://www.aerotek.com/automotive http://www.aerotek.com/automotive

Table of Contents Feed for the Digital Edition of Automotive News - April 14, 2008

Dealership jobs hit 8-year low GM is the wild card in axle war Service contracts: Hard-sell tactics plague dealers, customers TV auto ads shift to online, mobile venues At seminar, marketing execs to discuss new ways to reach customers Better get to know the Nano — it's set to change the world Veteran Detroit 3 dealer: 'The future is quite bleak' Poll: Dealers scrounge for cuts Locals closer to GM strike Scion xB price rises $100 Valeo CEO: No breakup Tata Nano changes low-cost development Hyundai tailors TV, Web ads for Hispanics Study: Ads focused on vehicle qualities won on Oscar night Post-Celine, Chrysler ad guru seeks right note Chrysler's quest for quality lured Nissan exec Betts Search starts for in-vehicle alcohol detectors After S. Calif. success, Honda may fund ad groups Computer images gain ground in TV ads Web TV offers automakers new ad, sales options BMW: X6 will bring brand new buyers Diana T. Kurylko Chrysler fields 'dream' ads Nissan seeks dealerships for trucks Honda will export Alabama-built Pilots to Russia Toyota, Subaru work on 'affordable' sports car Cadillac's ad agency savors the sweet life Some stores may not sell Chrysler hybrids GM hybrids get off to a slow start in first quarter Lexus adds a personal touch to pamper owners, prospects What they're buying — and what they're not The age of fuel innovation is here Approaches to r&d vary Nano brings credibility to Indian engineering Honda must revisit online dealer sales of service pacts Chrysler got it right Mandates, markets and buyer demand For Detroit, some things never change Buick: As Chicago goes, so goes the nation Auto industry has lost a good man Accentuate the positive Ex-Porsche CEO: Cayenne spiced up sales Green programs shape battle for engineering grads Tata rewards suppliers with ties to India Bill aims to set minimum sound levels for vehicles Industry lobbyists step up emissions fight Seeking wider market, Nissan equips sports car for snow New chief of SAE has D.C. skills China and GM's answer to Nano — sort of $2,500 car is Ratan Tata's personal quest NADA offers training in risky credit Donna Harris Deal's goal: Widen appeal of dent-repair coverage Title committee created Vehicle loan delinquencies rise from 2007 Suppliers to the 2009 Tata Nano Odd China combo: Fuel sippers, SUVs Pontiac Vibe: A sporty hauler with Toyota touches Dealers J.D. Power III named tracking company partner Toyota will buy back rusted Tacomas 100,000 Flex sales a year? Farley: 'Absolutely' Ford wants word-of-mouth campaign Small suppliers feel the pain of axle strike Plastech tries to sell 2 units TRW plant will build Ford gears Toyota plans 2nd India plant Dodge launch goes digital Toyota, GM recall 660,000 vehicles for window flaws Lear announces white-collar layoffs March output drops 23.6% New Ford ads tout quality improvements Tata dealers must be handy with a wrench Can the Greens slow down the autobahn? Racy scandal for race exec Echoes from the grave: Olds still has cachet The Final Say

Automotive News - April 14, 2008

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