Posted by: Bruce Einhorn on January 10, 2008
If you follow the auto business, the place to be today is New Delhi, where Tata Motors has unveiled its long-awaited $2500 car, the Nano. No doubt the folks at Tata are enjoying their moment in the spotlight, and deservedly so. When Ratan Tata first started talking about the company’s plans to develop an ultra-cheap car, lots of people said there was no way Tata could do it. Today, of course, there’s a huge amount of buzz around the car and the many creative ways Tata engineers found to cut costs. And many other, more established automakers are rushing to come out with inexpensive cars of their own for the developing world.
The hoopla around the People’s Car sounds a bit like the buzz that surrounded another high-profile project to create an ultra-low-cost product for poor countries. That is Nicholas Negroponte’s One Laptop Per Child project, aka the $100 laptop. Like Tata, Negroponte met with lots of naysayers who argued that it would be impossible to reduce costs so dramatically. And like Tata, the OLPC team came out with an innovative product that was indeed far more affordable than what the industry’s big names had been offering. One big difference, though, is OLPC didn’t meet its price point: While Negroponte talked about a $100 machine, the OLPC laptop (called the XO) that started rolling off of Quanta Computer’s Shanghai factory lines late last year costs closer to $200. And while the XO has dazzled techies with its design, it hasn’t yet won many fans in the places that matter most, India, China and other parts of the developing world. (For more on OLPC’s woes, see this blog item from my BW colleague, Bruce Nussbaum.)
Will Tata’s low-cost car end up with the same sort of problems as Negroponte’s low-cost laptop? The Tata Group, remember, is one of the most successful conglomerates in India and Ratan Tata and his executives certainly know how to market things in the country. So they have a much greater chance of commercial success than the team of academics Negroponte has assembled at OLPC. But amid all the hoopla surrounding their one-lakh car, the Tata folks might want to think about OLPC and its low-cost laptop. Cool design only gets you so far.