SpirE-Journal 2008 Q1

The world’s cheapest car by India’s very own Tata

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The world’s cheapest car by India’s very own Tata

In this year-end edition of the Spire E-Journal, Spire’s Group Managing Director, Leon Perera, shares his views on trends that will impact the business and marketing landscape in 2011 and beyond.

The world’s cheapest car by India’s very own Tata

The Tata Group unveiled their revolutionary Nano this January, immediately creating a stir among India’s consumers and industry players alike.

Dubbed the “People’s Car”, it is 3 metres long, has a 600cc engine, does 65 mph, seats four comfortably or five at a squeeze, and aims to revolutionise travel for millions. The basic Nano can be purchased at 1 lakh (USD2,500), roughly half the price of the cheapest cars available today – China’s QQ3Y Chery and India’s Maruti 800.

The Nano will first be sold in India from the second half of 2008, with an initial production run of 250,000 a year, but it is expected to be made available in Latin America, Southeast Asia and Africa in the not too distant future. Eventual annual demand is projected at 1 million. Much of that volume may be assembled by dealers or satellite units.

Experts and vendors have estimated the breakdown of the surprisingly low 1 lakh price tag:

Critics initially derided Tata’s 1 lakh price target, especially as oil and steel prices rocketed. But the unprecedented hype over Tata’s Nano, coupled with the Tata Group’s formidable marketing and distribution muscle, will ensure that small cars are going to flood Indian roads.

As more car-makers compete in the race for fuel-efficient technologies, Chevrolet, Toyota, Ford and Bajaj-Renault are some of the other big brands that will be eyeing the compact car market.

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