Fixes and Frugal Benefits - Implosion: India's Tryst with Reality - page 13

Mahindra talks about the 'jugaad trap' of equating different ways of thinking with what
used to be known as 'appropriate technology'. This, he says, 'is the most dangerous phrase
ever invented - appropriate technology is an act of condescension and makes you think the
consumer will make do with lower quality finish, features or aesthetics.' 10 That reminded
me of the fashion for appropriate technology in the 1980s, when foreign companies would
ship old production lines to India to make products ranging from cars to steelworks and
pulp mills - and India would be grateful and inefficient.
Carlos Ghosn, head of Renault and Nissan, is credited with bringing the phrase 'frugal
engineering' to India, where consultants and the media seized on it as a simple headline-
grabbing concept. Ghosn was about to make a saloon car, the Logan, with the Mahindra
group and was impressed, at the launch in 2006, that the procurement costs were 15 per
cent below budget. 'He asked me how we did it, and said we must be emulating “frugal
engineering”,' Anand Mahindra told me. 11 (The two companies did not follow through on
their joint venture plans. Like many other foreign companies' entry products in the past 20
years, the Logan looked too boring for the price and did not meet the demands of India's
aspirational market. Mahindra relaunched it as the lower-priced Verito.)
The Nano Story
Ravi Kant, vice chairman and former managing director of Tata Motors, describes jugaad
as a 'quick and dirty solution to problems, not an ideal solution but one that works'. A jug-
garu, he says, is a person who has been able to do this. 'It's positive that he has done it, but
negative that it may have been done through short cuts and not be ideal.' 12 He says that the
tiny but spacious 624cc Tata Nano, launched as the world's cheapest car in 2009 when he
was Tata Motors' managing director, is 'an example of frugal engineering which reduces
costs, but unlike jugaad, does not compromise on quality'.
The Nano has indeed often been praised as an example of low-cost manufacturing, but
its price was made possible partly by substantial state government loans, tax subsidies, and
other state government concessions that were initially agreed for a site at Singur in West
Bengal. 13 The terms were later matched and even improved, when Tata moved the factory
to Gujarat 14 after the Singur site became a trailblazer for violent social and political protests
against the use of rich agricultural land for industry. Tata also cut costs, and the eventual
price, by squeezing component suppliers' profit margins.
The vehicle development story is well told in a Tata-promoted topic, Small Wonder: The
Making of the Nano. 15 It tracks the excitement of the car's evolution, watched over by
Ratan Tata, whose interest in design and cars led him to be more personally involved in
Tata Motors than most other companies in the group when he was chairman of Tata Sons