World's cheapest car unveiled in India

Jan 10, 2008, 11:51 GMT

New Delhi - Tata Motor's Nano, the world's cheapest car at 2,500 dollars that was Thursday unveiled by India's Tata group at the ninth Auto Expo in Delhi, is expected to spur a paradigm shift in low-cost transportation by making the car affordable to thousands of families, company officials said.

Ratan Tata, the 70-year-old chairman of the Tata group, India's largest private conglomerate, is the brainchild behind the Nano.

The four-door car, which has a 33 horsepower, 623 cc engine at the rear, is designed with the family in mind and can seat four to five people.

With a length of 3.1 metres, width of 1.5 metres and height of 1.6 metres and adequate ground clearance, the car has been tested on roads across Indian cities and rural areas, the company said.

Nano costs less than half of India's cheapest car, the Maruti 800, and has attracted world-wide attention as it is expected to give sleepless nights to global car companies.

The launch of Nano would prove a landmark in the history of transportation, Tata said at the unveiling function.

Nano was 'a safe, affordable and all weather transport - a people's car designed to meet all safety standards and emissions laws and accessible to all,' he said.

The car will give 20 kilometers to a litre of petrol, and will be easy to maneuver on city roads as well as in rural areas.

Tata also allayed concerns about the car's safety and emission standards, saying it had passed the full frontal crash tests and meets Euro-IV emission norms.

'RK Pachauri (whose climate change panel received the Nobel Peace Prize with Al Gore) can stop having nightmares and Sunita Narain (an Indian environmentalist) can sleep well tonight,' Tata said, alluding to the environmental activists' concerns about the car's impact on the environment.

India's Commerce Minister Kamal Nath, who was present at the unveiling, said 'the car will help people move from two-wheeler to four-wheeler and it will leap-frog the two-wheeler.' Nearly 8 million two-wheelers were sold in India in 2006.

According to industry experts, small car sales account for more than two-thirds of India's domestic market, and are expected to nearly double to 2 million units a year by 2010, helped by rising middle-class incomes.

Tata, which announced plans for the car at the Genevea Motor Show in 2003, said personal mobility was the inspiration when he first thought of the car.

'I observed families riding on two-wheelers - the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby,' he said.

'It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family.'

Tata Motors' engineers and designers gave their all for about four years to realise this goal, he said.

'Today, we indeed have a People's Car, which is affordable and yet built to meet safety requirements and emission norms, to be fuel efficient and low on emissions.'

Addressing a press conference later, Tata said the car would come in two variants - the standard and the deluxe air-conditioned model - and would be launched after October 1.

The Nano, despite its low cost, was a profitable proposition for the company, Tata said, but declined to go into specifics of the margins.

The car will be manufactured at the company's facility in the eastern state of West Bengal, which aims at producing 250,000 units a year and ramp up production to 350,000 subsequently. Tata also has plans to introduce a diesel version of the car later.

The company will focus on the Indian market in the first two-three years, and later expand to overseas markets including South-East Asia and Africa.

Future plans also include selling the car in Europe and Tata Motors will leverage its alliance with Italian car-maker Fiat as a platform for marketing the car there.