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Sun, Apr 05, 2009 - Page 12 News List

Tata unveils world’s cheapest car

By Penny Macrae  /  AFP , NEW DELHI

Shoppers look at Tata Motor’s Nano car on display at a shopping mall in Mumbai, India, on Wednesday.


The Nano, dubbed “the world’s cheapest car,” went on display in showrooms across India on Wednesday, draswing crowds anxious to see and sit inside a vehicle that could transform their lives.

Buyers will be able to make reservations for Tata Motors’ small but sporty new vehicle, dubbed the “People’s Car,” which costs just 100,000 rupees (US$2,000), starting on Friday with a down payment of 2,999 rupees.

“This is a good car for me,” said office clerk Anil Kumar, 37, as he sat in the front of the five-seat car at a Tata dealership in New Delhi.

“It means safety for my family,” said Kumar, who transports his wife and three children around the city on a motorcycle.

“I’m going to buy one,” he said, as other potential owners jostled for a look at the silver, snub-nosed car that has a tiny two-cylinder, 33 horsepower engine and a top speed of 105km per hour.

Kumar is typical of the buyer that Tata Group chief Ratan Tata had in mind when he conceived of the Nano as an affordable way for poorer Indians to replace their unsafe motorcycles with safer cars.

Tata said he had wanted to create “a safe, affordable, all-weather form of transport” for Indian families. Families of four are regularly seen balancing precariously on motorcycles weaving through India’s notoriously lethal and congested traffic.

Analysts say the ultra-cheap Nano could revolutionize how millions in India and in other emerging economies travel. Indian ratings agency Crisil says the Nano’s price has cut the ownership cost of an entry level car by 30 percent.

Crisil said: “This will make the car affordable to an additional 14 million families, including a section of 58 million two-wheeler owners.”

The Nano drew worldwide attention at its launch in Mumbai last week and models for the European and US markets are in the pipeline.

The European version is costlier, with airbags and leather trim, and will be on sale by 2011. The US version needs redesigning to meet safety standards.

But even Indians will struggle to get their hands on the car in the near future, with demand expected to outstrip supply after Tata was forced to quit its main Nano plant because of a violent land row in West Bengal state.

The first Nanos will be rolled out of an existing plant while a new factory is built in Gujarat state. To cope with the wide interest and supply shortages, the first 100,000 owners are being selected by lottery. Some of those will not get their Nanos until next year, a Tata spokesman said.

But the car’s lack of fast acceleration because of its small engine worried one potential buyer, Chottu Lal Dhruv, a tea stall vendor, who makes out-of-town trips to Hindu temples with his wife and two children on his motorcycle.

“This is really a city car,” he said. “I need a car which can go long distances.”

The launch has come as India’s top vehicle maker is going through a rough patch as it tries to absorb British luxury marques Jaguar and Land Rover, which it bought last year and whose sales have plunged.

Despite its expected popularity, analysts say the Nano will not make a big contribution — at least in the early years — to the company’s bottom line with profit margins seen slim.

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