The Tata small car may end up to be a big deal, after all.
Emphatically silencing critics of all hues and ending months of feverish speculation, Tata Motors Ltd unveiled its Rs1 lakh car, dubbed the Tata Nano.
No small feat: Ratan Tata at the wheel of the Tata Nano, at the Auto Expo in New Delhi on Thursday. (Photo: Ramesh Pathania/ Mint)
The car, which becomes the world’s cheapest new car at $2,500, put to rest doubts about the ability of any car company, let alone an Indian company known more for its trucks than cars, to create a vehicle that, even rivals admit, is good looking and relatively state-of-the art for its class, including in its ability to meet India’s new emission norms two years ahead of a government deadline.
“Take it as it is,” said an unapologetic and punchy Ratan Tata, the 71-year-old chairman of Tata group. “Indian families (need) a safe, affordable, all-weather means of transport.”
Tata, whose personal desire for what was billed as the People’s Car, eventually led to the four-seater, 623cc engine car, also took pains to note that multiple variants, including upmarket ones, of the Tata Nano will eventually result in a profitable car line for the company.
Ratan Tata
Chairman, Tata Motors
Tata Motors is still building a factory in Singur, West Bengal, where it can produce up to 350,000 cars at full tilt sometime toward the end of 2008. Thursday’s unveiling of the car is now likely to intensify the debate among other car companies, especially in India, on how to respond.
With the exception of Carlos Ghosn, who heads Nissan Motor Co. and Renault SA, almost all other car companies have openly or privately pooh-poohed the notion of a Rs1 lakh car. But, India, where some 1.4 million new cars are sold each year, is also a hugely attractive market for dozens of car companies and most of them can’t risk ignoring what appears to now be a potent competitive advantage for Tata Motors. India’s car market is expected to touch 2.2 million units a year by 2010, according to the Society of Indian Automobile Manufacturers.
To be sure, Tata Motors will need to convert the initial euphoria into actual sales, especially because the company has had a checkered past in terms of the quality of its now successful flagship car, the Indica, which has already sold 800,000 units.
And Tata Motors is expected to try and ride a growing sense of patriotic support among many Indians about the Tata car breakthrough, as well as a nation where value shoppers are galore, forcing current leaders in small cars, such as Maruti Suzuki India Ltd and Hyundai Motor Co., to rethink their strategy of how they will defend market share.