Today’s release of the Tata Nano heralds a new era of car production that
could affect the automotive market as profoundly as Henry Ford's Model T did
almost a hundred years ago. Tata Motors’ new “People’s car”, costs less than
half the price of Chery Automobiles’ QQ3 and the Meruti 800, previously the
two cheapest cars in the world.
The international automotive industry is now attempting to meet the challenge
posed by Tata Motors by producing smaller, low cost cars of their own.
PriceWaterhouseCoopers has projected that over the next five years about half
the growth in automobile sales will come from Russia, India, Brazil and
China and most of the demand will be for small cars.
Last year Consultancy firm Ronald Berger estimated that global demand for
small cars, costing less than $10,000 (£5,000) would grow by 30 per cent.
Already there is considerable demand for small cars throughout Europe and
Latin America where Volkswagen’s Gol, Renault’s Clio and Nissan’s Tsuru sell
extremely strongly.
But Ratan Tata, chairman of Tata Motors says that while the Nano will
undoubtedly compete with other small cars, the Nano is actually the first
car in a whole new area of the market.
“The way I see it, this vehicle will cannibalise some of the lower-end car
market and some of the higher-end motorcycle and scooter market. It will eat
into both of those markets but it will also create a market of its own,”
said Mr Tata yesterday. “It will expand the market by creating a niche that
did not previously exist. It may well cannibalise some of the higher-end car
market, but to a small extent, and probably only when people look to buy a
second or third car.”
Last year, most major manufacturers announced their intention to build low
cost cars. Toyota, Volkswagen, Fiat and Peugeot are all intending to produce
a car to rival Renault’s Logan. The French automaker announced production of
the Logan in 1999 after the buyout of Dacia the previous year. Building the
car in Romania and Russia and stripping it of complex parts and luxuries,
Renault managed to keep costs low and the result proved a huge hit. Now in
an effort to produce cars that cost less than $5,000, the major
manufacturers are placing pressure on parts suppliers to cut their costs and
will rely on subsidiary companies to design and produce their bottom end
vehicles.
General Motors aims to use its Korean subsidiary Daewoo to design a car that
will retail at around $7,000. Chrysler has been producing cars with Chinese
marquee Chery to tap into the burgeoning Chinese market. Toyota is also
working on a low cost car which is expected to be launched in emerging
markets such as India by next year. But with the Nano going on sale in India
later this year with an initial production run of 250,000 units a year, Tata
has a huge head start on its rivals in the race for smaller, cheaper cars.
The five cheapest cars in the world
1. Nano. Produced by Tata Motors in India. Price: $2,500 (£1,250)
2. QQ3. Produced by Chery Automobiles in China Price: $5,000 (£2,500)
3. M800. Produced by Suzuki-Maruti in India. Price: $5,200 (£2,600)
4. Merrie Star. Produced by Geely Automobiles in China. Price: $5,500
(£2,750)
5. S-RV mini SUV. Produced by Geely Automobiles in China. Price: $5,780
(£2,890)
Sources: Reuters; Business Standard Motoring (India), Chinese auto Web
sites ($1=39.3 rupees)
No they are not the cheapest cars in the world, they are the cheapest cars in India.. By the time the UK cost have been added they will be expensive for what they are, like everything else here. Soon the delivery from the docks to your door will be more than the car cost !
Mark, Birmingham, England
Where are they? Why can't I buy one now. Ask Jeremy, I am sure he will enlighten us.
Dave, Redditch,
Excellent idea - cheap affordable motoring for the masses - its always worked and worked well - you only have to look at the beetle, or the mini, this is just a bit more extreme. It will even keep the tree huggers happy as it will surely (running a motorbike engine) be so fuel efficient it will make a fiesta look like it's single handedly killing the plannet! so cheap to buy, cheap to run, cheap to tax... but ugly as sin - a small price to pay... for a small price tag!
Jon Smith-Moorhouse, Loughborough, Leicestershire
Its a mAruti 800, not a mEruti, as metioned in the article.
Michael, Singapore,
Is this were the childhood saying going for a Ta-Ta comes from?
Stephen John Bamforth, Barnsley, South Yorks
The Post Second World War car manufacturing world bebuilt using the cheap car. Remember the German bubble cars, the Italian Topolino, Renaults assorted disaster's the 2 CV.....and now we start all over again in a new Asiacentric automotive world .......re-inventing the cheap car.
Let's dig up the Citroen 2 CV design, find an engine that works and strengthen the elastic bands!!!!!
Tom Norton, Phnom Penh, Cambodia
All very good but Tata cry some crocodile tears when it comes to " working for the people". They employ the same sneakiness and strong arm tactics when acquiring poor farmers' fertile lands using goons and political influence, as other less hypocritical corporations
S I Haider, Rayleigh, UK
A fitting finale to Ratan Tata's impressive career.
He has done a great deal to transform India into its current state, where it has a chance to become a manufacturing powerhouse.
Ratan eventually plans to export these around the world.
In a few years, Ford and GM are suddenly going to find a quiet but highly competent competitor devouring some of their market share.
Irt, Sydney, Australia
The name of Tata groups chairmain is "Ratan" Tata and not "Rajan" Tata as mentioned in the article.
darshak, mumbau, india
Well, where do we not have traffic jams? why blame only developing countries such as India for such chaotic traffic? As Infrastructure develops, things will improve. We should learn to appreciate the people of these countries who get on with life whole their government is trying to get its act together. Infact there are lots of places in India where the roads are empty. Maybe Mr. Rick Shaw should start riding an Indian (cycle)rickshaw on such roads!
Raja, MI, USA
Well, where do we not have traffic jams? why blame only developing countries such as India for such chaotic traffic? As Infrastructure develops, things will improve. We should learn to appreciate the people of these countries who get on with life whole their government is trying to get its act together. Infact there are lots of places in India where the roads are empty. Maybe Mr. Rick Shaw should start riding an Indian (cycle)rickshaw on such roads!
Dennis, MI, USA
very basic, looks great. as long as it go's stops turns I'd buy one tomorrow
Tim, Peterborough, UK, CAMB'S
I've been living in India for the past six months. You have to experience the roads here to appreciate how bad the situation is. Most Indians drive like others shop at the sales. There's no observation of any rules or etiquette. Whenever the traffic stops at a junction, for someone to park or any other reason the rest of the traffic simply piles up in any available space to get as far forward as possible; first the cars, then the rickshaws and finally the motorbikes. A two lane intersection quickly becomes four or five lanes spilling into the oncoming traffic. When exiting a road or trying to park you'd think the other road users had no brakes. They would rather cause a total jam than wait 5 seconds for you to complete a manouevre. Tata's low priced car can only add to this misery. And that 60mpg figure will be halved by the amount of time spent idle. It's not as if every other car here is big anyway. I think it would be better to send in the UN to police the roads.
Rick Shaw, Pune, India
This site http://www.wildfiremotors.com/ has for sale in Ohio a $5500 gasoline powered car and truck. These things actually exist. I have seen one on the street of Van Wert, Ohio.
Charles Good, Venedocia, Ohio, USA