New Delhi: Tata Motors is on track to begin selling its ultra-cheap small car next year, managing director Ravi Kant said on 5 September.
Ravi Kant, however, acknowledged that higher costs may make it difficult to stick to the targeted price of Rs1,00,000.
Steel and rubber prices have risen sharply in the past three years since company chairman Ratan Tata first announced a Rs1 lakh car.
Kant did not say whether the company would revise the price. “Wait for the launch,” he told reporters.
“We will launch the car sometime next year,” Kant said, clearing speculation that the project could be delayed by cost issues and political unrest last year at the site of its new plant in Singur in West Bengal.
Auto makers from around the world are keenly watching progress in the Tata project, which analysts say could set new price benchmarks and force other manufacturers to follow suit.
Already, French auto maker Renault SA and its Japanese partner, Nissan Motor Co., are exploring the possibility of making a compact car for less than US$3,000 (about Rs1.25 lakh).
Renault has said it is talking to some Indian manufacturers, including motorcycle and auto rickshaw manufacturer Bajaj Auto, for a possible partnership.
Japan’s Toyota Motor Corp., South Korea’s Hyundai Motor Co. and Chinese auto maker Chery could also be looking to make ultra-cheap cars in India, according to Craig Cather, chief executive of German auto consulting firm CSM Worldwide.
“A lot of companies are buying into this segment,” Cather said.
India is among the world’s fastest growing automobile markets, thanks to a booming economy that has boosted middle class incomes and spurred demand for cars. India also is emerging as an export hub for small cars.