Artist’s conception
Next year, Tata, the Indian industrial giant, will launch the world’s cheapest new car.
The company, which is one of the frontrunners to take over Jaguar and Land Rover, is bidding to capture a large share of the expanding Indian market with a four-wheeler for the price of a motorcycle.
This revolutionary Tata is known as the “one-lakh” car. A lakh is 100,000 rupees, about £1,225. It has been the dream of company chairman Ratan Tata for more than a decade. He promises a small, four-door car, with a simple specification, cheap to run, and attainable by Indian buyers who want to step up from two wheels to four.
As the Tata project comes close to fruition, vehicle makers around the world are planning ultra-low-cost cars, primarily for developing markets such as India but also with the expectation that they might appeal to motorists in western Europe…
The motoring press, talking heads and hacks will blather about danger or foolishness or eco-nuts – rarely comprehending, never understanding the viability of a niche that caters to economy and necessity.
Making money at this end of the market is the concern for the world’s biggest car companies, General Motors and Toyota, both of which are working on low-cost cars. These will be made in areas where labour costs are low, but that alone won’t make them viable; there needs to be a rethink of small-car design and engineering…
The collective rush into low-cost cars is driven by necessity. All the growth prospects are in developing countries. The largest mature markets – western Europe, North America, Japan – are either static or declining.
But as Toyota president Watanabe points out, although there are 900m cars on the world’s roads, two-thirds of the global population does not have one. Those people are its target for the future…
Tata’s OLRC will be about 3.5 metres long and have four doors plus an opening tailgate. It promises room for four adults, but there will not be much space for luggage unless the rear seats are folded down. Nor will there be any fancy trim – just a speedometer and fuel gauge.
The OLRC has a 660cc, two-cylinder petrol engine under the rear seat.
It won’t be fast but it won’t use much fuel either: it should do 70mpg.
A well-researched article. Facts and analysis for those who are inclined to study economics and politics – rather than react to “surprises”.
Can you see yourself driving around a car naned Tata? Hey baby, Like my tata? Oh you sell Tata’s? And your not a pimp? But I applaud any company for making a car that’s economical, efficient, and cost effective. I just hope they pull it all together. Last person I knew who owned a Royal Enfield ( Indian Motorcycle ) had a few problems with it; but they are supposed to be good bikes.
Tata – and all the other manufacturers lining up to do the same – is readying a version for Euro sales. They’ll be smart enough to develop a version for the U.S.. Not all of us have our gonads tied directly to the gas pedal.
They could land a low-emissions, 4-passenger car for commuting and shopping – for $5K or $6K – that gets 50-70mpg.
There should be a supportive market segment of Americans who might think of a car purchase as transportation instead of a style-based decision.
America is not yet ready for a car like this. It is way too small and would not be able to pass safety standards. Secondly, there would not be enough profit margin to make it worthwhile to most major manufacturers.
TATA’s business include:
1. India’s largest IT services and outsourcing provider.(TCS – TATA Consultancy Services)
2. They are India’s largest Auto maker (They make Cars, Buses and Trucks)
3. They make India’s finest watches (Titan) and jewellery(Tanishq)
4. They have the India’s largest steel Industry.
5. They also make Tea and Salt.
6. They also have Defence related industry.
7. They run one of the World’s best institutions IISc (Indian Inst. of Science) and Tata Institute.
8. They sponsor F1 cars.
9. Some more business, that I cannot recollect.
Interesting eh?
#4 – Penske is importing the smart starting in January, and it’s even smaller. They’ve received deposits on tens of thousands of them.
The smart has a 4 star EuroNCAP rating (hasn’t been tested in US yet), which is better than some SUVs. By law, truck-based SUVs don’t have to comply with many safety standards.
#1 how do you explain the PINTO? American made, yet all they had to do was ask any Spanish speaking person what that word meant.
Would you buy a Hummer if it was called TinyJohnny?
#4 wow, so it’s like NASA if it was privatized.
Cars don’t have to be made fully of steel to be safe. Crumple zones isn’t the only way, which the Mercedes Smart has proven.
The Smart For Two sells really well in Canada, lots of white/gray hair driving them.
So will the TATA if they come here, but why would they? Lots of profit to make everywhere else.
The US is a tiny market compared to the rest of the world that have people driving cars.
#5, But the Smart car starts @ 12K, We’re talking much cheaper here. Also it is said that the Mini Cooper shouldn’t warrant what it sells for. If anything I want to see, if they do come here, what the price would be.
#6, I guess my jokes don’t work on you do they even if they were well hidden in sarcasm that never works when posting somewheres. Shame on me.
Couldn’t happen here since the safety rules here would add thousands.
Tata, means “give it to daddy” in baby talk.
That car will be banned from North America.
It’s too practical.
I would consider buying one but I live in the city where it would be practical means of transport.
Doubt it would do well in the suburbs – doesn’t seem like it would handle the typical 300lb wife and kids.
Uncle Ben … hilarious! That could be the horn sound. 🙂
#11, Dallas,
Good point.
#9
“That car will be banned from North America.
It’s too practical.”
I predict it will be used in Hollywood movies with either the adorable loser or the extra skinny-limp-wristed-over-the-top stereotypical gay character.
Oh, just wonderful. When a few hundred million more Indians can afford cars, think $7.00 a gallon gas and a North Atlantic that feels like a hot tub.
They reinvented the BMC mini with two extra doors.
Wow! There’s no eco-nuts on this blog.
Apparently there’s no down-side at all to putting another billion or so cars on the road every day, all around the world.
Personally, I could use one of these Tata cars myself because there’s no way I can afford gasoline these days.
Another billion or so cars on the road ought to cut down on that pesky pollution stuff, too.
Greg, exactly! There goes any CO2 reduction efforts. And other countries are following Suit? We’re doomed.
Did anyone else notice that today is warmer than yesterday?
We started global pollution, and China and India claim the right to finish it. There’s nothing any of us can do except enjoy what time we have left.
Okay, there IS one way to save the earth. Dare I say it?
Though I rarely expect to find anyone here who knows anything about business, small or large – I’m bemused by the number of folks who are ignorant of what really happens in car sales.
The greatest contribution this package makes – regardless of manufacturer – is taking the worst smog-producing vehicles off the road and into scrapyards. Because the same rupees or euros you’d spend on a used car will get you a new car and a new car warranty.
It’s takes someone really foolish to pass up that opportunity.
Tata already has prototypes on the road [with the sort of silly disguises auto people adore] that produce less emissions than anything sold in that distant land. They’re not going to pass up the chance to sell in Europe either.
As for the U.S.? Maybe by the time Orlando is ankle-deep at high tide we’ll figure it out.
I hope they sell it in Portugal. With our taxes it may be an affordable $25.000 car………
#20 god
“…the same rupees or euros you’d spend on a used car will get you a new car…”
I realize you’re infallible but you neglected to mention there would be a billion or so additional new cars with less emissions than the existing 900 million older cars.
#14 “…or the extra skinny-limp-wristed-over-the-top stereotypical gay character.”
They already have the Miata for that.
#20 But this or any car produces more crap into the air when it is being built than it ever will driving. Is this thing going to be like the Yugo and fall apart and have to be replaced after 2 years?
A 650CC 2 cyl motorcycle gets about 60 mpg C/H. A 1.3L Fiat Panda gets about 43MPG. Take the 650 motorcycle, triple its weight, add another passenger and some gear and you’ll be lucky to get 35 MPG, There is efficiency in size up to a certain point, and a 2 cyl 650cc engine is way underpowered for a car.
Fuel efficient 2L 4 cyl NA cars get 35 MPG C/H, they have more pep, are larger and safer and can carry more. Despite what they say the Tata Hand It Over is built for price only. It costs 1/6 the cost of a regular car and there will be 6 times more of them, no savings in gas, swamping the expressways, and sucking up whatever oil is left. They are so cheap that if they were in NA, I would be tempted to buy 4 of them for my family for city driving only and keep my mini-van to for it’s usefulness.
That’s the reality god. By the way, where’s the million dollars I’ve been praying for… and… um… world peace, and an end to hunger?
I can see how a car might be nice during their monsoon season.
One market that Tata could explore is its own employees: TCS who are always looking for cheap used cars in the west!
They say there will eventually be a demand for a million of these Nano things.
As long as our gas prices are so HIGH and cars are high too, I would buy this car.Going for rides in evening was the only thing we used to do now we can’t even do that.