Friday, January 25, 2008

TATA Nano : is it Social Entrepreneurship?

I am just back from India after a two month stay touring all sorts of places – and I have decided India is two (at least two) parallel universes – intertwined but unconnected….and maybe just maybe…. The TATA Nano will provide a connection – and that’s social entrepreneurship- at least in the India context.

New Market: The Nano (the people’s car) target market is the 4 person family who cannot afford a car today - so along with folks in the large cities who can afford the SUVs– there will be a big rural demand for this car – i.e. a whole new market will be opened and a productivity and lifestyle improvement created that will benefit the India economy – and that means the global economy. This is the point critics of the Nano in India are missing as they envision choked (as if they can get any more choked) city streets.

Eco-friendly: The green-guys are missing the point that the Nano is pretty eco-friendly car (better mileage than Prius, same emisions as a scooter). If Tata can make enough Nanos to enter the export market and replace just the SUVs in Californmia that will take care of the added "Nano footprint".

Innovation: I believe it will spur innovation in the “green-car” space through competition – witness the announcements by almost all major car companies to do something including Ford. Since gas in India is almost twice what it costs in the US and the car is being sold to those who cannot really afford the gas – green alternatives will be developed – there is already talk of the e-nano and India does have the technology – witness the Reva electric car at Rs. 4 lakhs – catering mainly to the export market.

I used to be in the "Nano-is-disaster" camp but after being on the ground -in the target market for the car where it is the realization of a dream - I am a convert. I just hope TATA can make it to keep up with demand and it does not end up in the black market.

Check out the article Nano- hypocrisy below:
"Social Entrepreneurship will be no different from "core business" as the TATA Nano will demonstrate." says Gerardo Rego. I agree.