Hacker News Reader

Comment by brk | Hacker News Reader

Despite the question in the headline of this article, there is very little actionable advice. "Get closer to the customer" is about the best teaching the author can come up with.

There has been a lot of talk about this $2500 car, but everything I've read (in articles with actual data) indicate that there is no way to sell the car for $2500 and cover the cost of raw materials plus assembly/shipping. This is even with the concept of the dealer doing some of the final assembly. Then you have to offset R&D costs, and the other overhead of trying to run an automaker.

A car at a sub-$5,000 pricepoint might work in India, where the regulations are much less stringent than in the US. But, to imply that there is any great new innovation here that other automakers (I don't see Toyota with a $5,000 vehicle, either) have missed is somewhat of a stretch.

View on HN

As pointed by business week(via trak.in), the innovations made by Tata Nano are:

   1. The car was built from ground up.
   2. The supply chain was simplified by making the suppliers partners.
   3. Shipping the whole car as kits for the downstream distributors to assemble, thus reducing several costs.
   4. The key success factor for Tata Nano project was price. The price was fixed and everything else just worked around it.

Agreed, regulations are less stringent in India. However, price is an innovation. I can argue that a retrofitted Tata Nano will cost no more then $5000 for US market. So, there is ample room for innovation.

Given Detroit's record, the lesson they might take is:

    We need to hire more lobbyists to work on those pesky safety regs

Do you think this is the first car to be built from the "ground up" in the last 50 years?

Supply chains have been squeezed and simplified for the last several decades. It's not uncommon for all automakers to meet with suppliers and work with them to offset R&D costs and outsource the design and manufacture of various components.

The kitting of pieces isn't new either. One example of this is the Dodge Viper. It's been ~12 years since I was close to the process, but something like 80% of the Viper was built by various suppliers. Those suppliers shipped the pieces to Dodge for final assembly, but the Viper factor was little more than a dozen guys with air ratchets. Yes, I'm exaggerating slightly, but not by much.

And I still have not seen anything that says Tata makes even $1 in profit off that $2500 car. This project seems about as realistic that the $10 "laptop" people were talking about coming out of India also.

Reply on news.ycombinator.com