Tata unveils the Nano, world's cheapest car

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Tata unveils the Nano, world's cheapest car

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NEW DELHI (Reuters) - India's Tata Motors Ltd
unveiled the world's cheapest new car on Thursday, bringing car ownership
closer for millions of poorer consumers in emerging markets but raising
environmental concerns. The 4-seater Nano, with an engine around 625cc, will
have a dealer price of 100,000 rupees ($2,500), about half the cost of the
cheapest car on today's market, a 25-year old model from Maruti Suzuki Ltd,
Tata's great rival.

The Nano will go on sale later this year, the company said.”
Let me assure you and our critics the car we have designed will meet all safety
norms and all foreign environmental criteria," Chairman Ratan Tata said as
he proudly unveiled what had been dubbed the "People's Car" at the
Auto Expo in New Delhi.” In a way it is a high point for me. There is a sense
of achievement and vindication," he told reporters later.

The compact but curvy Nano stands in sharp contrast to the
luxury Jaguar and Land Rover brands that Tata is negotiating to acquire from
Ford Motor Co. Hundreds of people crowded into the pavilion to see the
long-awaited launch, standing on chairs to get the best view as Tata introduced
and then drove the car onto the stage in a media circus more worthy of a pop
concert or an Oscar ceremony. Tata planned the car years ago as a safer and
more affordable alternative for the millions who often ferry families of four,
plus baggage, on motorbikes and scooters. It’s a dream come true," Ashok
Singh, a constable with the Delhi Police, said at the show. "I look
forward to buying that car. My wife will be really happy.” New cars are
preferable to buyers in India, where the absence of an organized market for
second-hand cars makes buying them a tedious and sometimes risky process.

Environmentalists are not so enthusiastic. They worry
millions of the cheap cars
will flood on to India's roads, many of which are already heavily congested,
sending emissions levels sky high in Asia's third-biggest economy.

WAFER-THIN MARGINS :

The car arrives at a time when oil has topped $100 a barrel,
the move to fuel-efficient "green" cars is gaining momentum, and a
wave of nostalgia has spurred sales of brands such as BMW's Mini and the Fiat
500 Cinquecento. The car has a rear-mounted gasoline engine and travels 20km
per litre, with a basic model and two deluxe variants and plans for diesel
versions.” The proof of the pudding will be in driving it, but visually it
looks pretty good," said London-based auto analyst Ashvin Chotai, who was
at Thursday's unveiling. "The pricing was a bit of a surprise. I thought
it would be a bit higher."Tata said costs were kept low by cutting the
"size of the package", which brought about a reduction in material.
Innovative processes and systems, for which the firm has filed 33 patents, also
helped.