Implosion (6 page)

While the Nano remained frugal, a family engineering company in Bengaluru was showing how to develop new engineering at low cost with plastic-bodied electric cars.

The Reva Dream

‘Frugal engineering is jugaad plus innovation,’ says Sudarshan Maini, an engineering enthusiast and perfectionist. ‘When you see that jugaad is not producing the right quality and quantity for what you need, you innovate further to achieve it. That makes it a stepping stone to both innovation and frugal engineering.’

On my first visit to India in 1982, Maini held up a small precision-tuned automotive component between his fingers. ‘This is what we can produce in India,’ he proudly told me, standing in the Bengaluru factory of Maini Precision Products, a company he had set up nine years earlier to prove he could turn out international quality engineering components to micro tolerances and attract export customers. The finely machined and ground component was a cast iron lapping mandrel with a tolerance of 1 micron which, Maini explained, ensured the fine internal finish needed for fuel injection systems. Such levels of precision were all but unknown in India. Maini became motivated at the beginning of his career in the 1960s at Guest Keen & Williams (part of the British GKN group) in Kolkata. ‘So much was being talked about poor quality, but I knew we could produce the best quality in the world,’ he says.
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Maini’s memories illustrate the problems that the manufacturing industry faced in the early decades of independence. He was frustrated by the standards of work and by ‘lots of wasteful scrap and poor production’ at the Koltata factory when he took over as the company’s first Indian assistant manager. Employees were work-shy and management was weak. He tells a story about a man who had been given two weeks’ leave every year for the previous five years after producing telegrams that said his father had died.

‘I called him and asked, “How many fathers do you have?”,’ says Maini. ‘He was very upset and said he was going to kill the personal officer who had taken 500 rupees every year for getting the leave sanctioned.’

In the mid 1990s, General Motors (GM) started buying components from India and selected Maini, which became the American company’s smallest supplier. The components that GM needed were difficult to make because machining operations left complicated burrs (rough edges) on the metal surface. The order was for 8,000 pieces a day, which required 45 women just to remove the burrs. Jugaad came into play when the Mainis thought of a simple low-cost solution – a small device that enabled the burrs to be seen through a 45-degree mirror, making removal easy and reducing the number of workers involved to two.

‘If General Motors tells us it needs a special component in 30 days, we do a jugaad solution for that sort of fast development and production, maybe making it manually,’ says Sandeep, Maini’s eldest son, who now heads the group. The second stage is to put in a process to make the component reliably, and that means producing it by appropriate technology that is not jugaad – the process equals reliability.

Maini’s enthusiasm for perfection led the group to expand sales from Rs 1 crore in 1982 to Rs 350 crore in 2012, with 70 per cent of the production being exported and a product range that was diversified from automobile components to higher levels of precision engineering for the defence and aviation industries. Companies like Bosch, BAE, Boeing, Volvo and GE have become customers and the group is also into specialist vehicles and plastics, and is looking at automated logistics systems and warehousing.

Maini’s youngest son, Chetan, expanded the family’s engineering traditions by spending 15 years pioneering electric cars, which culminated in March 2013 in the launch of the latest ‘e20’ version of a car called the Reva.
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Chetan Maini’s interest in electric cars began with model vehicles when he was a child. While studying at the University of Michigan in the US, he worked, in 1990, on General Motors’ award-winning Sunracer solar-powered racing car, and in 1994, he co-founded the Reva Electric Car Company (RECC).

The Reva was first developed with an American company and the Mainis saved costs by sending some components from India, including a dashboard instrument panel from an established manufacturer in Coimbatore, the jugaad capital of southern India. ‘We designed and developed the testing equipment for a variety of components, including batteries, which on an average cost us less than 1 per cent of what we would normally pay if we bought the same in the market – a typical jugaad example,’ says Sudarshan Maini. Assembly of the electric cars started in 2001, with five people producing the first seven vehicles in Bengaluru. To avoid having to build an assembly track for the small quantities, the car’s tubular metal frame was put on wheels and pushed down the production line.

Eventually, to become a global brand, Reva needed more funds than the family was prepared to risk, and in 2010, the Mahindra auto-based group bought a 56 per cent stake in a new company, Mahindra Reva Electric Vehicles. Mahindra put in a total investment of Rs 100 crore and the Maini family holds a 24.6 per cent stake.
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The e20 is being produced at a new factory where 35 per cent of the energy needs are solar powered. The factory can produce 30,000 cars a year, a relatively small number by auto industry standards, but it is substantial for electric vehicles and a huge increase from the 4,000 older Revas sold till 2012. The 2013 sales target was a modest 400–500 vehicles, priced at around Rs 6 lakh, so it is not cheap.

It seems sad for a family that put so much effort and money into the project for 15 years to have to lose control. ‘We had mixed emotions about letting go,’ says Sandeep, explaining the catch-22 situation that they could not get financial backing till they produced a viable model and production line, which could not be done without funds. ‘We didn’t have deep pockets – we were technical creators, and we also needed competence to develop markets and car manufacturing processes.’ Mahindra met those requirements. Anand Mahindra is committed to using frugal engineering to drive innovation and, having talked to various other companies, the Mainis felt that he had the most commitment to electric vehicles and appreciation of what Chetan, who is still in charge as Mahindra Reva’s chief executive, had been trying to achieve.

In recognition of his work, Chetan was awarded
The Economist
magazine group’s Innovation Award for Energy and the Environment in 2011.
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The dream is that the e20 could become the first electric car in the world to make a profit, but that will be difficult, given the price and the lack of demand for such vehicles. Sudarshan has told the story of the Reva in a book published in 2013.
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The family is proud of its frugally engineered innovation, which has broken new ground with all-electric power, zero emissions and solar power battery-charging ports. Drivers can have access to the car from a smart phone app that can control air conditioning and locking controls, and trigger a remote emergency battery charge system. ‘It’s definitely been worthwhile as a pioneering effort that doesn’t come along every day,’ says Gautam, Sudarshan’s middle son. ‘We gained a lot of respect because people know we put our own money at stake,’ says Sandeep.

Notes

1
.   ‘SC brakes on road “menace”‘,
The Telegraph
, 16 May 2013,
http://www.telegraphindia.com/1130516/jsp/nation/story_16904625.jsp#.UfjbXqyfouQ

2
.   ‘Ludhiana fails to shed most-polluted city tag’,
Tribune,
http://www.tribuneindia.com/2012/20121004/ldh1.htm

3
.   Sudarshan Maini, founder of Maini Precision Products of Bangalore, in conversation with JE.

4
.   ‘UPA is a “jugaad” expert: Nitish Kumar’,
The Times of India
, 18 September 2012,
http://articles.timesofindia.indiatimes.com/2012-09-18/india/33925129_1_upa-allies-fdi-decision-upa-government

5
.   ‘The Scoop on Poop’,
Business Today
, 19 August 2012

6
.   Described in Navi Radjou, Jaideep Prabhu and Simone Ahuja,
Jugaad Innovation

7
.   ‘He bit the Bullet, turned it into farm equipment’,
The Times of India
, 23 May 2012,
http://www.nif.org.in/dwn_files/Print.pdf

8
.   ‘Why “Made in India” is just a slogan’, Harish Damodaran,
Business Line,
8 May 2012,
http://www.thehindubusinessline.com/opinion/columns/harish-damodaran/article3397771.ece

9
.   Anand Mahindra in conversation with JE, March 2012

10
. ‘Thinking Differently: The state of Indian innovation’,
Fortune India,
April 2012

11
. Anand Mahindra in conversation with JE, March 2012

12
. Ravi Kant in conversation with JE, March 2012

13
. Tata Motors’ West Bengal package of loans, tax concessions and other benefits for the Nano site, which matched an earlier offer from the state of Uttarakhand, is available on
http://www.wbidc.com/images/pdf/Agreement%20between%20TML,%20WBIDC%20and%20Government%20of%20West%20Bengal.pdf
; Tata requested in 2008 that it should not be publicized and obtained a court order to keep it secret.

14
. ‘Ratan Tata announces Nano plant in Gujarat’, 19 January 2009, ‘Asked about the overall deal offered by the Gujarat government, Tata said, “It is as good as or slightly better than the one we had previously,” (in West Bengal)’
http://www.timesnow.tv/Nano-to-roll-out-of-Sanand-Gujarat/articleshow/4312189.cms
; In 2010, Tata disputed Gujarat’s estimate of the size of a substantial soft loan, the first instalment of which was eventually paid in February 2013,
http://timesofindia. indiatimes.com/business/india-business/Tata-Motors-get-first-part-of-assured-funds-from-Gujarat/articleshow/18652120.cms

15
.
Small Wonder – the making of the Nano
,
http://www.westlandbooks.in/book_details.php?cat_id=5&book_id=209

16
. ‘Nano test drive review’,
AutoCar India
, 19 August 2009,
http://www.autocarindia.com/Review/269238,tata-nano-old.aspx

17
.
http://ridingtheelephant.wordpress.com/2012/12/29/ratan-tata-indias-sensitive-and-visionary-tycoon-steps-down/

18
. ‘Tata Motors bets on series of launches, including a low-cost composite car’,
Economic Times
, 24 February 2013,
http://economictimes.indiatimes.com/news/news-by-industry/auto/automobiles/et-exclusive-tata-motors-next-gen-for-road-ahead--a-prototype-of-low-cost-car/articleshow/18648578.cms

19
.
http://ridingtheelephant.wordpress.com/2008/01/10/nano-achieves-ratan-tata%E2%80%99s-dream/

20
. ‘Why India needs a Nano’, Suhel Seth, FT.com, 22 March 2009,
http://www.ft.com/cms/s/0/8003d9f8-16a9-11de-9a72-0000779fd2ac.html

21
. ‘Tata’s “One-Lakh” Nano – let’s cool the hype,
http://ridingtheelephant.wordpress.com/2009/03/23/tata%E2%80%99s-%E2%80%9Cone-lakh%E2%80%9D-nano-%E2%80%93-let%E2%80%99s-cool-the-hype/and FT.com 23 March 2009 http://www.ft.com/cms/s/0/2b47c97e-178f-11de-8c9d-0000779fd2ac.html

22
. Sudarshan Maini and his sons Sandeep and Gautam in conversation with JE, Bangalore, December 2012.

23
.
http://ridingtheelephant.wordpress.com/2013/03/19/indian-engineering-excellence-produces-a-new-reva-electric-car/

24
. ‘Why Mahindra & Mahindra needs Reva’,
Forbes India
, 10 June 2010,
http://forbesindia.com/article/big-bet/why-mahindra-mahindra-needs-reva/14052/0
and Chetan Maini interview, same date,
http://forbesindia.com/interview/magazine-extra/chetan-maini-spells-out-the-rationale-behind-selling-reva/14062/0

25
.
http://www.economistconferences.co.uk/innovation/energyandtheenvironmentwinner2011

26
. Dr S.K. Maini with Sandhya Mendonca,
Reva EV: India’s Green Gift to the World
, Random House India, 2012,
http://www.randomhouse.co.in/BookDetails.aspx?BookId=toXun7mSaq0%3d

3
Fault Lines

Jugaad and chalta hai do India more damage on a macro level. They build fault lines that undermine and erode established institutional systems that are central to the functioning of a society and economy. They contribute to India’s failures to operate efficiently and instil a lack of responsibility that stretches from opposition parties blocking parliamentary proceedings to failure to mend broken roads and tackle public health risks. The self-centred focus of society comes into play here. For example, if chalta hai will keep the country functioning at a tolerable level, the opposition parties in parliament need have no qualms about pursuing their own interests and stymieing the government’s attempts to pass legislation. Parliament lost between 70 per cent and 80 per cent of available working time in the 2012 monsoon session because of opposition demonstrations and about 50 per cent was similarly lost in the 2013 Budget session,
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up from a third in 2011 and over 40 per cent in 2010.
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Similarly, if jugaad and chalta hai together keep the country’s defence forces equipped and operating at what appears to be a tolerable level, the defence establishment (which includes grossly inefficient public sector corporations) can afford to look after its own interests with comfortable jobs, patronage and the luxury of dealing with foreign suppliers and their agents, while restricting the ambit of the more efficient private sector. Similarly, the aviation ministry and government-owned Air India can wallow in the luxury and spoils of crony patronage while the airline declines and airports are developed largely for the benefit of the companies involved. There are similar self-serving examples across the public sector.