India

Why Indians Are So Thrilled by Tata's Nano


http://images.businessweek.com/mz/09/19/600/0919_60nano.jpg

Mumbai: Dealers are mobbed with people wanting just to touch the Nano Gautam Singh/AP Photo

For his first meeting with the object of his desire, Rajesh Murthy, 32, clean-cut and handsome, gets a haircut, a new shirt, and a wad of cash. The resident of Ghaziabad, a low-income suburb of New Delhi, wakes up early, calls his boss at the restaurant where he runs the cash register to say he's taking a sick day, and then drives a half-hour on his motorcycle to a dealership in South Delhi. There, he stands in line with hundreds of fans, pushing through the crowd at every opportunity, eagerly craning his neck for a glimpse. "I can't wait," he says, his eyes darting around to look for an opening in the throngs of people. "I saw it once two years ago, and since then I have been dreaming of bringing it home, surprising my parents. Oh, my wife, she will be so happy."

Suddenly, the doors open and he is ushered into another crowded room. There, in the corner, just as he remembered it, is a pristine, white Tata Nano. Brand-new, the factory paint still shiny, a bright red ribbon crisscrossing its hood, its doors invitingly open, the car seems to beckon to Murthy. In the two and a half years since Murthy first saw pictures of a Nano prototype, the car has become an obsession for him and countless other Indians. He dreams about the $2,000 "People's Car," he tells me sheepishly, running his hand through his hair. "Quickly," he says, grabbing my hand, and together we half-run to the car.

Like 350,000 other people all across India, Murthy puts down an $80 deposit to enter a lottery. Only a lucky 100,000 winners will get to buy a Nano in the next 12 months. They have to take their chances, because Tata Motors (TTM), which dreamed up, designed, and then produced the cheapest car in the world, has a problem that General Motors (GM), Ford (F), and Chrysler only wish they had: far too many customers. Pressure from local politicians angry about Tata using farmers' land for its proposed factory in West Bengal forced the company last year to give up and start again in Gujarat, a state in India's west with a pro-business government. The new factory there won't be complete until late 2009, so for now Tata has to ration access to the Nano.

It is difficult for many Westerners to imagine what cars mean for Indians. For decades, Indians chafed under a controlled economy, choosing from two cars—the tank-like Ambassador, unchanged since the 1950s, with its sofa seats and lumbering engine, and the ladylike Fiat, modeled on the 1957 1200D, short and petite, with an awkward gearbox attached to the steering wheel. Few people could afford new cars, and secondhand, thirdhand, and even fourthhand cars were coveted.

Car Blessings

In the early '90s, the economy opened up, and suddenly there were choices, some affordable, most not. New cars, almost always the Maruti 800, designed by Japan's Suzuki (7269.T) and built by the Indian government, would be delivered to houses, their gleaming, factory-fresh bodies festooned with ribbons and flowers. With envious neighbors glaring, the new owner would gingerly drive the car to a temple, where a priest would crack open a coconut and say a prayer, blessing both the car and its occupants.

Then the neighborhood kids would pile in, and for weeks the owner would be obliged to drive them around, letting them honk the horn, sit in the driver's seat, and hold the steering wheel. "I felt so unshackled," says my father, a government employee in Kolkata, who in 1989 bought a three-year-old Ambassador for 70,000 rupees (approximately $1,400 today), an amount it took him years to save and borrow. The car, which we nicknamed the Black Beauty, was the first anybody in the extended family ever owned. "I could go anywhere," my father says. "In the rain, in the sun, whenever."

But for so many more Indians—not poor but not rich either, infuriatingly trapped between the lower-middle class and the middle-middle class—cars remained a marker of prosperity they couldn't reach. Just to afford a $1,000 motorcycle, they scrounged and saved, and then, with their wives and their children and sometimes a friend all balanced on the bike's narrow seats, off they went in the never-ending summers of India, balancing between life and death on the way to a picnic, dodging rich people's cars and poor people's cows. "Since the first time I saw the Nano, I started to hate my motorcycle," says Murthy, who has given me a ride to the Tata dealer on the back of his 100cc Yamaha.

The sight of a family of four struggling through the rain on a motorcycle, the story goes, is what gave billionaire industrialist Ratan Tata the idea to build the world's most inexpensive car. Many people sniggered. "It can't be done," they said. A newspaper editor I once worked for laughed at it, saying it would be a four-wheeled rickshaw, with rubber flaps for doors. "Will airbags be included? Will seat belts? There is so much that is not known about this car," Suzuki Chief Osamu Suzuki asked back in December 2007.

"The Impossible Suddenly Became Possible"

Still, the Nano is a car—a real, affordable car—and in the glare of the world's attention, it is undeniably Indian. The Nano "is a car that they don't have to be ashamed of," says Gautam Sen, editor of Auto India, India's largest car magazine. "This is the kind of car that kind of transcends class." After Ratan Tata first unveiled a prototype of the Nano in January last year, traffic in parts of central Delhi came to a halt as an estimated 300,000 people came to the car show to stare at their dream. For the next year, the Nano seeped into the national consciousness. A graphic novelist, Sarnath Banerjee, did a full-page cartoon for the Hindustan Times on the Nano, and as we sip coffee on his balcony in a tony Delhi neighborhood one day eight months after the launch, he tries to figure out what the car really means. "It's as if the impossible suddenly became possible," he says.

As they waited for the car to go on sale this month, people talked about the Nano nonstop, picking out colors and delaying other purchases to save for the car. In August when protesters, bitter over how the government had taken land from them before leasing it to Tata, surrounded the automaker's plant, many Indians hated them for forcing them to wait longer for their dream car. Mamata Banerjee, the leader of the protests, now sighs when I ask her about the car finally going on sale. "I don't know," she says in Bengali. "Things could have been worked out. Every time I see an ad for the car, I feel like Tata launched the car just to make me look bad."

Restaurant worker Rajesh Murthy, though, is mainly focused on just getting one for himself. As I go with him to the Tata showroom, he tells me he has cleaned out his bank account and is now carrying 120,000 rupees ($2,400) in cash, in the hope that maybe he can just put the money in front of some manager and persuade him to let Murthy drive the car right out of the showroom and right into his life. Patting the wad of money in the pocket of his new shirt, Murthy says he knows the chance of that happening is slim.

And sure enough, like everybody else, he has to fill out a form, get it stamped, and leave his $80 deposit. He also has to show papers proving he is employed and has paid his taxes, his lease from his small, one-room rented apartment he shares with his parents, an aunt, and his wife, and a passbook from a savings account that he has had since he was 18.

While Murthy negotiates the paperwork, I corner a salesman, V. Ramakrishnan. I want him to tell me stories of the wild crowds, surging toward a tiny car, but instead Ramakrishnan tells me of his little adventure. The cars in the showroom are only to be looked at and touched, not to be test-driven. However, to get the salesmen used to the car so they can make their pitches, the dealership's owner let them all take short spins. "Five minutes," says Ramakrishnan.

How did you feel?

"Amazing," he says. "Like a rich man."

Srivastava reports for BusinessWeek from New Delhi.

Srivastava is a reporter-at-large for Bloomberg News in London. He also reports for Bloomberg Businessweek.

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