Of Nanos and Cities

The launch of the world’s least expensive car, the Tata Nano, developed by Tata Motors, has attracted attention around the world from the automotive industry, media commentators, environmentalists and presumably from the millions who today cannot afford to own cars. Tata Motors has to be complimented for its engineering feat, for it has, by and large, stood by its promise – the “standard” version of the Nano (excluding air conditioning, radio or power steering) will be priced at Rs 1,00,000 (not including value added tax, local taxes, transport and delivery charges). At approximately $ 2,500, the Nano will be the lowest priced car in the world. Hitherto, the industry more or less agreed that the price of a contemporary “small car” could not be lower than $ 5,000, if it were to be well-designed and if it were to yield at least “normal” profit margins. But the head of the Tata group, Ratan Tata, unveiled a differently engineered, elegant 33 hp car, fitted with a 623 cc rear (petrol) engine, assuring a fuel mileage of 21.97 km per litre under city road conditions and compliance with Bharat Stage-III and Euro-IV emission standards – at half the price that has been hitherto considered the norm.

Tata Motors, India’s premier manufacturer of commercial vehicles and cars, has the credit of developing the country’s first, commercially successful, indigenous car, the Indica. Besides the relative labour cost advantage, close integration of design, develop ment and manufacture, strong backward and forward linkages, especially with an internationally competitive auto components sector, and interwoven as it is with the machine tools and metals sector, the company seems set to alter the current benchmarks of competition in the industry.