India’s Tata Motors unveils US$2,500 car,
bringing car ownership into millions’ reach
NEW DELHI: India’s Tata Motors on January 10th unveiled the world’s cheapest car, a US$2,500 four-door subcompact the company promises will revolutionize the auto industry, bringing car ownership into the reach of tens of millions of people.But the potential of the vehicle has given environmentalist nightmares, with visions of the tiny cars clogging India’s already-choked roads and collectively spewing millions of tons of polluting carbon dioxide into the air.But industry analysts believe the car, christened the Tata Nano, could do for India and the developing world what Ford’s Model T did for America nearly a century ago — make it possible for the vast majority to own their own cars.”It is a potentially gigantic development if it delivers what has been promised,” said John Casesa, managing partner for the Casesa Shapiro Group, a New York-based auto industry financial advisory firm.
“I think there is immense unmet demand for a vehicle of this type, because it effectively eliminates the great leap currently required to go from a two-wheel to a four-wheel vehicle,” Casesa said. “They are creating something that has never existed before, the utility of a car with the affordability of a motorcycle.”
Company chairman Ratan Tata, who introduced the new car at India’s main auto show, said the basic model will sell for 100,000 rupees — US$2,500 (€1,700) — but analysts estimate customers could pay 20-30 percent more to cover taxes, delivery and other charges.
Tata has long promised that he’d create a 100,000-rupee “People’s Car” for India — a country of some 1.1 billion where only seven of every 1,000 people own a car — a vow that was much-derided in the global industry which said it would be impossible without sacrificing safety and quality.
“A promise is a promise,” Tata told the crowd after driving onto a stage in a white, luxury version of the car, his head nearly touching the roof. Four company executives emerged from another, indicating that the car can fit four — or five if they squeeze.
The company was cagey about how they kept the price so low on the basic version and declined to say how much the luxury Nano will cost until it hits showrooms toward the end of this year. The company also refused to let reporters sit in the car, let alone drive it.
But the basic version is spare: there’s no radio, passenger-side mirror, central locking or power steering and only one windshield wiper. If you want air conditioning for India’s brutal summers, you need the deluxe version.
The little car, with its snub nose, sloping roof, and slightly bulbous rear that makes it look like another Indian icon — the mango — could soon have illustrious companions, with Tata in negotiations to buy Jaguar and Land Rover from Ford.
The Nano’s obvious appeal, though, is not its pedigree but its price — targeting people moving up from the lower ends of India’s transportation spectrum, where two-wheeled scooters selling for as little as US$900 are often crammed with entire families.
The Nano’s closest competitor here is the Maruti 800, a four-door selling for nearly twice as much.
In terms of performance it doesn’t offer much more than the Model T. The Nano has a two-cylinder 0.6 liter gasoline engine with 33 horsepower, giving it a top speed of about 100 kilometers (60 miles) per hour, according to Tata. It gets 20 kilometers per liter (50 miles per gallon).
The Model T cost US$825 in 1909 (or more than US$19,000 in today’s dollars, according to the Web site measuringworth.com) and could do 72 kph (45 mph) with its 20-horsepower, four-cylinder engine.
Analysts believe the Nano could transform the auto industry, forcing manufacturers to lower prices, and perhaps find cheaper ways to sell cars than in sprawling showrooms. French auto maker Renault SA and its Japanese partner, Nissan Motor Co., are trying to determine if they can sell a compact car for less than US$3,000.
“Most of the other carmakers are watching this development very closely,” said S. Ramnath, an auto analyst at Mumbai-based brokerage firm SSK Securities Ltd.
For now, the car will be sold only in India, but Tata said it hoped to export it across Asia, Latin America and Africa in two or three years.
Tata initially plans to manufacture some 250,000 Nanos per year, nearly a quarter of the slightly more than 1 million cars sold in India last year.
Environmentalists having nightmares
But the car has fueled a host of concerns.
With developing countries like India and China putting more and more cars on the roads, it has created a greater demand for fuel, contributing to sky-high global oil prices. India consumed nearly 120 million tons of petroleum products in 2006-2007, according to the Petroleum Ministry, up from 113 million tons the previous year.
And the idea of such a low-cost vehicle has environmentalists petrified, conjuring images of a huge influx of cars, traffic jams at midnight, hours-long commutes and increasing pollution.
Chief U.N. climate scientist Rajendra Pachauri, who shared last year’s Nobel Peace Prize, said last month that “I am having nightmares” about the car.
“Dr. Pachauri need not have nightmares,” Tata said at the unveiling, promising the Nano met all current Indian emission standards, adding his company did not have the resources to produce millions of new cars.
His promises, though, don’t reassure everybody.
“If you’re talking about urban environment, it will cause serious problems,” said Jamie Leather, a transport specialist with the Asian Development Bank. “The cheaper and cheaper vehicles become, the quicker those pollution levels will increase,” Leather said.
What do you think ?
Well, what do you think of this news ? The world’s top 2 countries with the highest population, China and India, are proving that they too are beginning to catch up with the developed countries, saying, “Hey, we are going to, or shall we say, we are already living the life that you in developed countries are living and we will enjoy it as how you are enjoying it.” Developed countries used to laugh and brag about their technologies, enjoying all the conveniences they have brought to themselves, thinking that they will be able to keep all of that to themselves. Unfortunately, their own technologies have created a world that wishes to share the same ease and quality in life and now, they are beginning to fear about the limit of natural sources, a distributed market that they used to monopolized alone and the rest that comes along with the growing of development in the two countries. Oh well, developed countries, it’s time you start sharing methods to live an easy life and at the same time, maintaining a sustainable world for everyone to share together.