India’s Tata Rolls Out World’s Cheapest Car

MUMBAI ~ India’s Tata Motors launched the world’s cheapest car this week, the Nano, hoping to revolutionize travel for millions and buck a slump in auto sales caused by the global economic crisis.

Company boss Ratan Tata said the no-frills vehicle, slated to cost just 100,000 rupees (US$2,000) for the basic model, will get India’s middle-class urban population off motorcycles and into safer, affordable cars.

“I think we are at the gates of offering a new form of transport to the people of India and later, I hope, other markets elsewhere in the world,” he said, describing the launch as a “milestone.”

“The present economic situation makes it somewhat… more attractive to the buying public,” he told reporters in Mumbai.

The wraps were taken off three Nanos – dubbed “The People’s Car” – at a glitzy, open-air ceremony at a south Mumbai sports ground on Monday.

Tata confirmed that the basic model would be 100,000 rupees direct from the factory, not including tax and transportation. The cheapest showroom price is 112,735 rupees.

Potential owners of the car – which is just over three meters long and has a top speed of 105 kilometers per hour – can apply between April 9 and 25, Tata managing director Ravi Kant said.

A ballot will then select 100,000 people to be the first to get the keys to the vehicle and deliveries will start in early July 2009, he added.

Even affluent Indians are eyeing up the Nano, which has a two-cylinder engine and four-speed manual transmission but no air conditioning, electric windows or power steering.

Versions with air conditioning and power steering will be available, costing up to 170,335 rupees for a deluxe model straight from the factory floor, or 185,375 from a Mumbai showroom.

Car dealers say they have been flooded with queries about the Nano, whose debut was delayed after violent protests over the acquisition of farmland to build the plant, forcing Tata Motors to shift from West Bengal state.

But the new plant in Gujarat in western India will not be ready until late this year or early 2010, Tata said, meaning production must come from existing factories, reducing output and increasing waiting times for deliveries.

Kant said 250,000 to 500,000 cars could be produced from the Gujarat plant from next year but admitted some customers may have to wait more than 12 months in the meantime to take possession of their Nano.

Tata, though, said it was the right decision to push ahead with Monday’s launch of the 20-billion-rupee project.

The Nano’s arrival comes at a tough time for India’s top vehicle maker, hit by the economic slowdown at home and abroad as it tries to absorb the British luxury marques Jaguar and Land Rover that it bought last year for 2.3 billion dollars.

Tata is hoping the Nano will also be a hit overseas in the long term.

Earlier this month, the firm unveiled a European Nano sporting airbags and leather trim that will hit the market by 2011 but be costlier than in India due to the extra features.

A US version is also on the drawing board but requires redesigning to meet American safety standards.

Environmentalists, however, fear the Nano will accelerate congestion on India’s already crowded, potholed roads and add to choking pollution.

“Every car that goes on the road is going to use road space. We’re only adding to congestion,” said Rajendra Pachauri, head of the UN’s climate panel, which won the 2007 Nobel Prize.

Tata countered by saying that the Nano would be the least-polluting car in India.

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