India launches world's cheapest car: The Nano (Roundup)

Mar 23, 2009, 16:14 GMT

New Delhi - The Nano, the world's cheapest car, that has been billed by its manufacturers as having the potential to redefine personal transportation in modern India, was launched in the country's financial hub of Mumbai on Monday.

The commercial roll-out by Tata Motors of the Nano, which is to sell for 100,000 rupees (about 1,984 dollars), comes 14 months after its prototype attracted global attention at a car show in New Delhi in January 2008.

Three Nanos with blinking headlights drove onto a stage at a glitzy function in Mumbai Monday evening where a presenter introduced it as a 'car that will change the world'.

'The product is before you and it meets all that it set out to do,' Tata Motors chairman Rata Tata said, adding that the vehicle would enable Indian families to own an affordable, all-weather mode of transportation.

The company kept the factory price of the Nano base model at 100,000 rupees. The car would cost 112,735 rupees after transportation charges and value-added tax at the showrooms.

'I'm pleased to say that the promise (of a 100,000-rupee car) has been kept today. A promise is a promise,' the 71-year old chairman of India's largest business house said.

The bookings for the 'People's Car' are to be taken from April 9 - 25. The first 100,000 recipients would be selected by a ballot.

The three-metre long, four-door Nano is to hit Indian roads in early July when deliveries are expected to begin.

The 624-cc jellybean car with a snub nose can reach a top speed of 105 kilometres per hour and deliver a fuel efficiency of 23.6 kilometres per litre.

With just enough room for five people, the Nano will be available in three variants - standard, deluxe and luxury. The base model will have no air-conditioning, airbags, radio or power steering.

The car with a small 33-bhp engine at the rear, is targeted at the huge Indian middle-class population that aspires to trade two- wheelers for a safer vehicle at an affordable price.

Auto experts said the Nano would give an additional 14 million Indian families access to an affordable car, creating a niche segment.

According to market research firm Crisil, tje Nano's price reduces the cost of ownership of an entry-level car by 30 per cent and to below three times the cost of owning a motorcycle.

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

But the demand for the Nano is expected to outstrip supply, with company executives saying it would take at least one year to deliver the first 100,000 cars.

The car is currently being manufactured in limited numbers at the Tata Motor's plant in the northern state of Uttarakhand.

According to Tata Motors, the new main Nano plant at Sanand in western Gujarat state is scheduled to become operational by 2010 with a capacity for the manufacture of 350,000 cars a year.

There are concerns that the small car could mean big problems for Indian roads.

Environmental activists say that an influx of these cars could drive public transport and two-wheelers off the roads and greatly increase urban congestion and environmental degradation.

As critics question the Nano's safety and emission standards, Tata said the car has the lowest carbon dioxide emission amongst cars in India and will also meet the stringent Euro 4 norms.

The Nano's safety performance 'exceeds' current regulatory requirements it has passed the roll-over and the impact tests which are not regulated in India, according to the company said.

With the global economic situation making low-cost cars an attractive proposition, Tata Motors' is looking at overseas markets.

The company is expected to launch a US model, meeting requirements of the US market, in the next three years. The launch of a slightly bigger European version, the Nano Europa is planned for 2011.