How does $2,500 for a brand new automobile sound? And, where do you sign up? Not so fast.
The designed-and-built-in-India Tata Nano, which was first displayed at this year's New Delhi, India, and Geneva, Switzerland, auto shows and goes on sale in October, will most likely never make it to North America. For now it's strictly a home-market model designed for the tens of millions of Indian families who yearn to own a car, but for whom such a luxury is beyond their means. Historically, a bicycle or their own two feet is all they had, while the more fiscally fortunate owned motorcycles or scooters.
Company boss Ratan Tata is out to change that situation and capitalize on India's increasing prosperity. As chairman of India's largest automobile company (and the second-largest producer of passenger cars, now including Jaguar and Land Rover brands that were recently purchased from Ford), the 70-year-old visionary plans to bring the Nano to market at a starting price of 100,000 rupees, the equivalent of about $2,500 (plus taxes). That's about half of India's current low-cost champ, the $4,800 Suzuki Maruti.
A number of industry leaders have scoffed at Tata's plan, stating there is virtually no way to profitably market any four-wheeled, all-steel, enclosed passenger car at such a ridiculously low price, but Tata intends to prove them wrong and rewrite the book on turning out inexpensive vehicles in the process.
If Tata can pull it off, the Nano promises to be the modern version of the Model T Ford or Volkswagen Beetle, both of which were initially dismissed in their day as a joke and their creators as delusional crackpots.
Although the Nano was conceived by Tata, getting to the production stage has been no easy task. It has taken the efforts of more than 100 outside suppliers to pull it off. All were challenged to engineer the simplest, most cost-effective components possible. In return, the companies, nearly all Indian-based or running operations in that country, receive exclusive (single-source) long-term contracts that ensures their factories keep humming and that there's steady employment for their workers.
So exactly what do you get for a car priced in about the same range as a decent sofa or big-screen TV? The Nano, which was actually designed in Italy with significant input from Mr. Tata himself, is equipped with a 0.6-litre two-cylinder engine that's mounted, VW Beetle-style, at the rear and operates through a four-speed manual transmission. The base model also features bare plastic front and rear bumpers, 12-inch steel wheels, a single outside mirror for the driver, roll-up windows and manual steering. Deluxe versions, which could cost as much as $7,000, will come with, or will offer an automatic transmission, air conditioning, a radio, power windows and fancier wheels, to name just a few amenities. A diesel engine option is also reportedly in the works.
The Tata Nano may not ever make it to Canada, but that hasn’t stopped car buyers from salivating over so cheap a car.
To keep both manufacturing costs and curb weight under the 600-kilogram target, the Nano contains some interesting features. The Bosch-designed electric power generator weighs two pounds less than a standard unit, the instrument cluster weight has been reduced by one-half (to less than half a kilogram), the wheels are attached using just three bolts instead of four and a single windshield wiper is employed. The rear-engine configuration allows for a lighter, less expensive steering and front suspension systems.
Structural integrity was also a big issue in designing the Nano, since it must meet both home-market safety standards as well as those in other potential importing nations, including Europe. As well, Tata hopes the relatively clean-burning powerplant combined with an ultra-low list price will convince drivers of seriously polluting two- and three-wheeled vehicles currently choking India's cities to upgrade to the Nano.
The company's sales projections call for 250,000 cars to be made in the first year and upwards of 1,000,000 vehicles in three to four years. To hit these lofty numbers, Tata is looking to offer the car in put-together kit form and will eventually attempt to expand sales into Africa, the Middle East and China. Why not North America? At this point, it appears the Nano would not meet local safety regs, despite its possible benefits as an urban commuter vehicle here.
The Nano might have its skeptics, but other manufacturers are taking more than a passing interest in its development. Competing Indian automakers as well as importers are considering their own responses to Tata's low-ball conveyance, while other global auto companies are studying Tata's methods to uncover greater efficiencies in their own operations.
In the meantime, the new owner of Jaguar/Land Rover has established his company as a major player in the automobile business. It remains to be seen whether Ratan Tata can succeed with his Nano endeavor, or, as his critics suggest, has seriously overestimated sales and revenue targets.
With Tata's grand vision for such a small car, it would be unwise to bet against him.
The Nano, particularly inside, is as basic as a car can get.
Malcolm Gunn is a feature writer with Wheelbase Communications. You can drop him a note on the Web at www.wheelbase.ws/mailbag.html. Wheelbase Communications supplies automotive news and features to newspapers across North America.
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