Product Innovation from Chinese and Indian Automobile Industries - Case study of Geely and Tata

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Abstract:

This paper contains a comparative analysis of the product innovation by Indian and Chinese carmakers, more specifically it looks at Geely’s early range of low cost cars and Tata’s Nano, which at the time was claimed to be the world’s cheapest car. Based on the theoretical foundation of notion of disruptive innovation and Fujimoto's description of product architecture, it focuses on the transition from the closed-integral approach to product architecture found in many of the traditional large automobile manufacturers to the relatively open product architectures (either modular or quasi-open architecture) found in automobile manufacturers from the emerging economies. Our analysis will illustrate the common points and differences in the two cases; it will also highlight some of the implications that changes in product architecture might have in terms of product and business model innovation. The paper will conclude with some observations about the nature of disruptive innovations by carmakers from emerging economies and the implications of this, not only for low-income markets, but also in the more developed markets of Europe and America.