Frugal Engineering and the U.S.?

After reading the article on frugal engineering, I became interested in how frugally-designed products, specifically for the transportation sector, are received in developed countries. The article mentions many products originally marketed for “the bottom of the pyramid” (BOP) that end up being sold in the U.S. and Europe as well; yet does not provide many tangible success stories. Also, the article constantly tries to assure its audience that just because a product is frugally designed doesn’t mean it lacks high quality and serves its primary purpose. Perhaps Western consumers and businesses have adopted the notion that frugal engineering creates “cheap [as in inferior] versions” of the products they regularly use and enjoy.

As stated in the article, frugally engineered products are meant to “provide the essential functions” its consumers need at a price they can afford. Someone living in an impoverished and possibly inhospitable environment would not demand a Bluetooth or a Bose sound system installed in their vehicle before they would even consider purchasing it. This, of course, is not meant to critique a Westerner’s preference in automobiles (most in developed countries simply have the means to dictate the market). Yet that same individual living in an under-developed country perceivably would demand the same performance and reliability out of their vehicle regardless of it lacking additional comforts – and that is what frugal engineering delivers.

For example, Tata’s “Nano,” which was mentioned consistently throughout the article because of its low cost, only has dealerships in India (visit http://www.tatanano.com/home.htm for more information). I was curious about how the “Nano” would fair overseas in North America. In terms of cost, a basic 2012 Prius costs about eight times as much as a Nano (~$3,000<$24,000). In terms of performance, even though the Prius has a bigger engine (4 cylinders>2 cylinders), the Nano gets better gas mileage (60 mpg > 42 mpg). In terms of the North American market, however, the Prius has been utilized by only a small subset of the 260 billion U.S. drivers (probably due to its price and the social bias that comes with driving one). Would the Nano do much better in the U.S.? I’m certainly not qualified to say, but I definitely think it would be purchased by an even smaller subset of the U.S. driving population because it lacks the large engine and the comforts (and distractions) of a standard car.

Regardless of marketing the Nano to North Americans, an even bigger opportunity may have been missed. As this article and the article on “Design Thinking for Social Innovation” note, North American companies are often playing catch-up to foreign companies that are designing frugal products. Perhaps these Western companies are skeptical of their competitor’s business decisions and the lasting impact of their products, but these do not seem like sufficient excuses. If one of the major car manufacturers from Detroit could employ American workers to mass-produce low-cost cars and then export them to the countries where citizens would depend on them for subsistence, well, then perhaps the American auto-industry could return to its former glory. But, then again, maybe that is asking too much.