India’s auto industry is the ninth-largest in the world, as this emerging market makes the switch from motor scooters to cars. Following an economic liberalization in 1991, Tata Motors emerged as the biggest Indian manufacturer, capturing 70% of the commercial market. Their latest innovation was the production of the Nano car, which many analysts say was “a game changer” in the way cars are made and marketed. Now American companies like Ford and General Motors are examining how they can get involved in this market.
This September, Tata Motors (India’s biggest auto manufacturer) unveiled the cheapest car to hit the road. The Nano has been referred to by the company as “the People’s Car,” which will cost motorists just 1 Pakistani lakh (or $2,500 in US dollars). Even though commodity prices have risen significantly, Tata has kept its four-year promise to consumers by keeping the cost to them unbelievably low. The four-door sedan seats four people, runs off a two-cylinder gas engine in the rear, gets 50 miles to the gallon and features an all-sheet metal body that looks very much like the Mercedes Smart Car. Drivers who are used to creature comforts like air conditioning, power steering, antilock brakes, electric windows and rear seatbelts may be disappointed to learn that this gem of nanoscience carries none of those things. Some of these Nano accessories — like air conditioning — may be available at an extra cost, but leaving out some of the fanciness is part of the allure with this simple vehicle.
Despite what it lacks, the low price has some critics fearing that the world will be inundated with all these new drivers — which means more accidents, more traffic and more pollution. However, Ratan Tata assured consumers that he only plans to release 500,000 little cars in the coming years. Competitors from BMW and Volkswagen to Suzuki and Hyundai admitted that Tata Motors’ new Nano — priced at half the amount of the cheapest car in India — would be difficult to match. The only competitor even in the same ballpark is the Suzuki Maruti, which accounts for half the sales in India and starts at $3,865 USD. “We don’t know how to make a 1-lakh car unless we sacrifice something,” admits Shinzo Nakanishi, managing director of Maruti Suzuki India.
Strangely enough “The People’s Car” is fetching a pretty penny on the used car market already. Tata Motors has 200,000 customers signed up and waiting for the next batch of cars to be manufactured. Through a lottery, they chose the first 100,000 lucky buyers, although it will take until the end of 2010 to get all the vehicles delivered. In the meantime, the rich and famous want to be the first on the block to have this car — at any cost. The Drive website from Australia reports that some consumers are paying a 30% markup for a secondhand Nano car. “They tend to be very rich people who want the Nano for the snob value because it’s new in the market,” said Arif Fazulbhoy, director of Fazulbhoy Motors.
Beth Kaminski is the co-author of Curing Your Anxiety And Panic Attacks which detailed end panic attacks as well as tips on the various panic disorder medications available at anxietydisordercure.com.
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