Global biggies to source parts from Nano vendors for low-cost models

NEW DELHI: Key component suppliers of Nano are set to reap the benefits of their low-cost technologies that made the world’s cheapest car a Making of Nano
World's fastest car Ultimate Aero
Cars with Class
New SUVs to hit Indian roads

reality, with global biggies such as Nissan-Renault , Toyota, VW and Honda approaching them for parts for their low-cost cars.

With as many as seven small cars lining up for Indian debut in the next two years, Nano’s 100-odd vendors are already cheering. Nano’s only direct competitor, Rajiv Bajaj’s $2,500 car, is expected to draw extensively from Nano vendor base.

“It would inevitably use (the Nano parts suppliers ). The project will source almost 100% from the Bajaj supply base, but many suppliers in that pool is also common to the Nano,” said a person with direct knowledge of the Nissan-Renault-Bajaj ultra lowcost car project, who asked not to be named.

Officials with ACMA, the apex body for the auto component industry, said carmakers, two-wheeler manufacturers and commercial vehicle companies were trying to halve the cost of their new products. All of them are looking at replicating the Nano experience in their products, said Jayant Davar, president of ACMA and vice-chairman and managing director of Sandhar Technologies.

“They are looking at launching their vehicles at lower prices than their existing range. But before they tie up officially, they want their components to be validated by their Japanese and other overseas parents,” he said.
Key component makers such as Bosch have already been approached. Bernd Bohr, member of the board of management at Bosch, had told ET NOW earlier that the Tata Nano project is giving Bosch a good entry point with other original equipment manufacturers (OEMs) that were thinking of the same segment.

A Delhi-based Nano supplier said he made presentations to some MNCs customers that wanted to use the technology developed for the Tata group’s small car. “Now they are sourcing components from us for their small cars that are slated for launch in the next 2-3 years,” he said, requesting anonymity.

Understandably, most vehicle makers deny they have anything to do with the Nano. From GM to Honda to Toyota to Volkswagen, the common response is that the small cars lined up for India will not be in the Nano category and will not be of the same quality. However, vendors say the Nano takeaway is not in replicating the same components but in replicating the processes that made the Nano so cost-effective .

India’s small car market, which comprises 80% of the 1.5 million units industry, will see a number of new launches in the next 14 months. Nearly all the big names of the auto world have announced fresh projects . Toyota is working on a platform for a small car with an investment of over Rs 3,000 crore.

Honda has also announced its first small car that will have India as the hub. Hyundai, which already has best-selling small cars such as the Santro, i10 and the Getz in the Indian market, has announced a new car positioned below the Santro with an investment of Rs 800 crore. VW’s Polo, GM’s Chevy Beat and Nissan’s Micra will debut in 2010. The Bajaj low-cost car is due in 2012.