MUMBAI: There was the $400 airplane seat that plummeted
to $40. Then there was the $2,000 laptop reborn for $200. And now
the $25,000 car has a $2,500 cousin.
Every now and again in business history, a disruption comes along
that breaks the conventional wisdom about cost, tweaking and paring
features once thought untouchable.
Likewise, the $2,500 car, scheduled for introduction Thursday by
the Indian company Tata, swims against the current, with a
rear-mounted engine, a trunk that fits little more than a
briefcase, and plastics and adhesives replacing metal and bolts in
certain nooks. (Some analysts expect the car to be priced closer to
$3,000, still making it the cheapest on earth.)
But the still-untold story of how the Tata car was built is less
about big-bang innovations than about a long string of $20 trims: a
steering-wheel shaft rendered hollow here, a small headlight
leveler removed there, the use of an analog speedometer less
accurate than its digital equivalent.
The car is thus a triumph, not of one great invention but of a new
engineering philosophy rising out of the developing world, with
potential to change how cars everywhere are made, industry experts
say. Just as Japan popularized kanban (just in time) and kaizen
(continuous improvement), so Tata may export to the world what can
perhaps be called "Gandhi engineering" - a mantra that combines
irreverence toward established ways with a scarcity mentality that
spurns superfluities.
"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 Rolley,
the head of North American and Asian operations for Ariba, which
provides parts for Tata and other auto makers like BMW and Toyota.
"In the next 5 to 10 years, the whole auto industry is going to be
flipped upside-down."
continued...