THE Tata Nano, the world’s cheapest car, became a symbol before the first one rolled off the production line in 2009. The Tata group, India’s most revered conglomerate, hyped it as the embodiment of a revolution. Frugal innovation would put consumer products, of which a $2,000 car was merely a foretaste, within reach of ordinary Indians and Chinese. Asian engineers would reimagine Western products with all the unnecessary frills stripped out. The cost savings would be so huge that frugal ideas would conquer the world. The Nano would herald India’s arrival just as the Toyota once heralded Japan’s.
Alas, the miracle car was dogged with problems from the first. Protesting farmers forced Tata Motors to move production out of one Indian state and into another. Early sales failed to catch fire, but some of the cars did, literally. Rural customers showed little desire to shift from trucks to cars. The Nano’s failure to live up to the hype raises a bigger question. Is frugal innovation being oversold? Can Western companies relax?
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