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...