[tt] NYT: Four Wheels for the Masses: The $2,500 Car

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Most of the cars I or my parents owned had no air conditioning. Only one 
of mine had power steering and power brakes. Most of my early cars would 
not have met EPA standards.

Four Wheels for the Masses: The $2,500 Car
New York Times, 8.1.8
http://www.nytimes.com/2008/01/08/business/worldbusiness/08indiacar.html

By ANAND GIRIDHARADAS

MUMBAI, India -- What does it take to build the world's cheapest
car?

For Tata Motors of India, which will introduce its ultra-cheap car
on Thursday, the better question was, what could it take out?

The company has kept its new vehicle under wraps, but interviews
with suppliers and others involved in its construction reveal some
of its cost-cutting engineering secrets -- including a hollowed out
steering-wheel shaft, a trunk with space for a briefcase and a
rear-mounted engine not much more powerful than a high-end riding
mower.

The upside is a car expected to retail for as little as the
equivalent of $2,500, or about the price of the optional DVD player
on the Lexus LX 470 sport utility vehicle.

The downside is a car that would most likely fail emission and
safety standards on any Western road, and, perhaps, in India in a
few years, when the country imposes tougher environmental standards.

But Tata is not looking to ply California's highways. Instead, the
company wants to provide four-wheel transportation for the first
time to people accustomed to getting around on two, including
hundreds of millions of Indians and others in the developing world.

Even so, the "People's Car" (a nickname, since Tata has kept the
real name under wraps, too) may ultimately affect what many people
drive around the world, since it is part of a broader trend among
carmakers to try to build less expensive cars.

"It's basically throwing out everything the auto industry had
thought about cost structures in the past and taking out a clean
sheet of paper and asking, `What's possible?'" said Daryl T. Rolley,
head of North American and Asian operations for Ariba, which helps
supply parts to Tata, BMW, Toyota and other carmakers. "In the next
five to 10 years, the whole auto industry is going to be flipped
upside down."

The French-Japanese alliance Renault-Nissan and the Indian-Japanese
joint venture Maruti Suzuki are trying to figure out how to make
ultra-cheap cars for India. And struggling Western automakers are
looking to see where the cost-obsessed ethos of the developing world
can help their bottom line. In the most recent example, Ford was
expected to announce Tuesday that it would make India its
manufacturing hub for low-cost cars.

Some analysts are predicting that just as the Japanese popularized
kanban (just in time) and kaizen (continuous improvement), Indians
could export a kind of "Gandhian engineering," combining irreverence
for conventional ways of thinking with a frugality born of scarcity.
Or, as Indian auto executive Ashok K. Taneja describes the
philosophy, "When I need silver, why am I investing in gold?"

Some of the few people who have seen the car describe a tiny,
charming, four-door, five-seater hatchback shaped like a jelly bean,
small in the front and broad in the back, the better to reduce wind
resistance and permit a cheaper engine. "It's a nice car -- cute,"
said A. K. Chaturvedi, senior vice president of business development
at Lumax Industries, a supplier in Delhi that developed the car's
headlights and interior lamps.

Driving the cost-cutting were Tata's engineers, who in an earlier
project questioned whether their trucks really needed all four brake
pads or could make do with three. As they built Tata's new car, for
about half the price of the next-cheapest Indian alternative, their
guiding philosophy was: Do we really need that?

The model appearing on Thursday has no radio, no power steering, no
power windows, no air-conditioning and one windshield wiper instead
of two, according to suppliers and Tata's own statements. Bucking
prevailing habits, the car lacks a tachometer and uses an analog
rather than digital speedometer, according to Mr. Taneja, who until
recently was president of the Automotive Component Manufacturers
Association of India, representing many of Tata's suppliers as they
signed deals with the company.

Frugal engineering pervades the car's internal machinery, too, with
even greater implications for the vehicle's safety and longevity.

To save $10, Tata engineers redesigned the suspension to eliminate
actuators in the headlights, the levelers that adjust the angle of
the beam depending on how the car is loaded, according to Mr.
Chaturvedi of Lumax. In lieu of the solid steel beam that typically
connects steering wheels to axles, one supplier, Sona Koyo Steering
Systems, used a hollow tube, said Kiran Deshmukh, the chief
operating officer of the company, which is based in Delhi.

Tata chose wheel bearings that are strong enough to drive the car up
to 45 miles an hour, but they will wear quickly above that speed,
reducing the car's life span but not threatening consumer safety,
according to Mr. Taneja. The car's top speed is 75 miles an hour.

Reducing the weight curbed material costs and enabled the company to
use a cheaper engine. People familiar with the car describe a $700
rear-mounted engine built by the German company Bosch, measuring 600
to 660 cubic centimeters, with a horsepower in the range of 30 to
35. By comparison, the Honda Fit, one of the smallest cars available
in the United States, has a horsepower of 109.

According to industry experts, the car runs on a continuous variable
transmission, a lighter alternative to manual or automatic
transmissions.

Though it was never popular in the United States because of its
often sluggish acceleration, continuous transmission was once
widespread in Europe and has resurfaced in the United States in
vehicles like the Nissan Murano S.U.V. and the Toyota Prius.

While Tata reverted to old technologies in places -- Leonardo da
Vinci conceived an elegant precursor to the continuous transmission
in the 15th century -- it embraced cutting-edge sourcing practices,
said Mr. Rolley at Ariba, which has assisted both Tata and its
foreign rivals in buying parts.

Traditionally, carmakers cultivated long-term relationships with
suppliers, but companies have gradually embraced electronic
sourcing, using Internet auctions that force suppliers to compete
for business. But even the most efficient carmakers buy no more than
10 percent to 15 percent of parts electronically, Mr. Rolley said.
Tata sources 30 percent to 40 percent that way.

Critics of the Tata car have asked how a car that prunes thousands
of dollars off regular prices can possibly comply with safety and
environmental norms. The answer may be that the car comes at a
particular moment in India's development, when the country is
affluent enough to support strong demand for automobiles but still
less regulated than developed countries.

Tata officials say the car will comply with all Indian norms. But
they are changing. India's major cities plan to adopt the Euro IV
emissions standard in April 2010, requiring a 35-fold reduction in
sulfur emissions over the current Euro III standard, according to
Anumita Roychowdhury of the Center for Science and Environment in
New Delhi.

New safety rules mandating air bags, antilock brakes and full-body
crash tests are also coming, Ms. Roychowdhury said.

She said it was unlikely the car would be able to keep its populist
price tag once those regulations take effect.

And the car may be less environmentally friendly than it claims.
Unlike cars in the United States, Indian vehicles do not have to
come in for regular inspections after they are on real roads, which
often batter the systems that curb emissions.

Michael Walsh, a pollution consultant and former United States
Environmental Protection Agency regulator, said that a car so cheap
was likely to lack the complex technology to maintain its initial
level of emissions and that without such technology cars could soon
be producing four to five times their initial pollution level.

"It strikes me as impossible that such a vehicle will be a very
clean vehicle over the life of the vehicle," Mr. Walsh said.

In a recent interview, Ratan Tata, chairman of the Tata Group, also
suggested that the car's lightness, while favorable for the
environment, had frustrated efforts to make it safe. "We will have
far lower emissions than today's low-end cars," he said. But, he
added, "the emissions standards were much easier to meet than the
crash test."

In most American cars, safety features alone cost more than $2,500,
said Adrian Lund, president of the Insurance Institute for Highway
Safety in Arlington, Va. But, he added, "if what we're talking about
in India is people having the option of getting off the streets,
from motorcycles and bicycles where they are at risk from bigger
vehicles, this may actually be an improvement of the safety
environment."

Even if the Tata car never drives on Western roads, the philosophy
behind it will influence global car makers, Mr. Rolley of Ariba
said.

Manufacturers are searching for ways to make small cars for the
middle class in India and China; to produce small cars for their own
markets, hurt by rising gas prices; and to improve the profit of
existing larger cars. Tata's car would be mined for applicable
lessons, Mr. Rolley said, predicting that more would be designed
with cost in mind.

In one past example, after Renault-Nissan began making cheap cars in
Romania, it transferred low-cost engineering techniques to its
plants producing more expensive models -- for example, making doors
flatter so they could be stacked in greater volume in shipping
containers, according to Pauline Kee, a Nissan spokeswoman.

Consumers in wealthy nations can perhaps expect more hollow steering
shafts, actuator-free headlights and tiny trunks.

"This will be no different," Mr. Rolley said, "from when U.S.
companies spent a whole decade in the '80s thinking about what
Japanese management techniques they had to adopt."