Tata Motors Nano Car

India’s auto industry is the ninth-largest in the world, as this emerging market makes the switch from motor scooters to cars. Following an economic liberalization in 1991, Tata Motors emerged as the biggest Indian manufacturer, capturing 70% of the commercial market. Their latest innovation was the production of the Nano car, which many analysts say was “a game changer” in the way cars are made and marketed. Now American companies like Ford and General Motors are examining how they can get involved in this market.

This September, Tata Motors (India’s biggest auto manufacturer) unveiled the cheapest car to hit the road. The Nano has been referred to by the company as “the People’s Car,” which will cost motorists just 1 Pakistani lakh (or $2,500 in US dollars). Even though commodity prices have risen significantly, Tata has kept its four-year promise to consumers by keeping the cost to them unbelievably low. The four-door sedan seats four people, runs off a two-cylinder gas engine in the rear, gets 50 miles to the gallon and features an all-sheet metal body that looks very much like the Mercedes Smart Car. Drivers who are used to creature comforts like air conditioning, power steering, antilock brakes, electric windows and rear seatbelts may be disappointed to learn that this gem of nanoscience carries none of those things. Some of these Nano accessories — like air conditioning — may be available at an extra cost, but leaving out some of the fanciness is part of the allure with this simple vehicle.

As with any vehicle, the Nano car will have several model varieties. The Tata Motors’ base model will have no extras but will be the cheapest of any car on the market. The Deluxe Nano CX includes air conditioning; the Luxury Nano LX has air conditioning, power windows, fabric seats and power locks for 49,000 Rupees more than the base model. The Nano Europa will have a larger body, bigger 3-cylinder engine, anti-lock brakes and will meet all European crash/emission standards. In the future, proposals include creating a new Nano hybrid, a diesel engine version, an engine that runs off compressed air and an electric Nano.

Ironically, the world’s cheapest car is selling at 30% higher in the secondhand market already, as trendy consumers clamor to have the new Tata Motors novelty. Since the production can’t possibly meet the current demand, there is a pool of people who don’t mind paying more to be the first on the block with the new Nano. Even though the Nano car is viewed by industry analysts and business leaders as an overwhelming success, there are still some concerns that these cars will contribute to some of the problems India is experiencing. For instance, 90,000 people die in car accidents each year, which is among the highest in the world. The number of drivers is expected to soar from 7 in 1,000 to 11 in 1,000 by 2010, but first there must be some additional regulations to prevent tens of thousands of lives from ending early.

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