Tata Nano, People's Car [Merged]

[architect]

From AFP -

India's Tata group set to launch world's cheapest car

NEW DELHI (AFP) — India's giant Tata Group plans to launch the world's cheapest car early in January while also looking set to drive off with two of the poshest marques -- Ford's iconic Jaguar and Land Rover brands.

Ratan Tata, head of the tea-to-steel Tata conglomerate, will unveil the "People's Car" January 10 at a New Delhi auto show that will carry a sticker price of 100,000 rupees, or 2,500 dollars, which some analysts say could revolutionise automobile costs worldwide.
And Tata, which has been on an aggressive overseas expansion drive, is also expected to win its reported two-billion-dollar bid for the British Land Rover and Jaguar brands in January -- putting it in the unusual position of making two prestige cars as well as the world's lowest-cost automobile.

The cheap car, a pet project of Cornell-trained architect Ratan Tata that he helped design, is aimed at getting India's masses off their motorbikes and into cars.

"I hope to make a contribution to making life safer for them (the masses)," said reclusive tycoon Ratan Tata, who has spearheaded the growth strategy of the company known for its philanthropic values and paternal management style.

"That's what drove me -- a man on a two-wheeler with a child standing in front, his wife sitting behind, add to that the wet roads -- a family in potential danger," Tata, who turned 70 on Friday, said on the company website.

But despite its low price and safety factors, analysts say the four-door, five-seater could be a tough sell for Tata's vehicle arm, Tata Motors, even with an economy growing by a scorching nine percent, creating new affluence.

If motorbike owners wanted to graduate to cars, there are a lot of good second-hand cars for 100,000 rupees or less, analysts say.

"You don't find large sections of two-wheeler owners buying second-hand cars simply because they don't find them as attractive a proposition," said Mahantesh Sabarad, analyst at Mumbai brokerage Prabhudas Lilladher.

"A two-wheeler, the most popular kind, would cost 35,000 to 40,000 rupees, so it's still a big jump up," Sabarad said, adding cars cost far more to maintain.

"It will not be an immediately profitable venture, it will take a longer time to break even -- at least three years," said Angel Broking analyst Vaishali Jajoo.

Tata has said it's targeting the car at Indian and eventually other emerging markets. A Tata Motors board member recently revealed the car would get a significant 25 kilometres (15.5 miles) per litre.

"Acceleration wise, it's the same as a Maruti 800," board member R.A. Mashelkar said, referring to the most popular budget model made by Japanese-owned rival Maruti Suzuki that sells for 4,800 dollars.

A lot is riding on the cheap car with Tata Motors "betting large sums of money," said Sabarad.

"The projected expenditure of Tata Motors and suppliers on the project is 25 to 30 billion rupees. Half of that amount is what Tata Motors would spend."

Tata Motors is taking on the challenge at a time when its share price has slid some 20 percent this year due to a decline in its vehicle sales.

Analysts, meanwhile, are also wary of Tata's bid for Jaguar and Land Rover, saying a global economic slowdown would hit luxury car sales.

"I really doubt Tata Motors can do better than Ford did with these brands over the past decade," said Sabarad.

"They're definitely not looking at a near-term view in their strategy," added Jajoo.
If the cheap car is a winner, environmentalists fear it will further congest India's clogged roads and add to choking pollution.

But Tata says the car will create no more pollution than a motorbike and is confident of its success.

"We should be able to create a new market that does not exist," said Ratan Tata, forecasting an annual market of a million cars.

Total two-wheeler sales were nearly eight million last year while car sales were around one million, said Sachin Mathur, research head at leading Indian credit rating agency Crisil.
"The cost of motorcycle ownership is three to four times lower than that for a car. That's why you won't see car sale volumes going from one million to eight million overnight," he said.

But a cheaper car "will provide some acceleration to market growth" at the same time as forcing other automakers to cut prices as well as produce cheaper cars, Mathur said.

[architect]

From Businessweek -

My Other Car Is a Tata

The soon-to-be-released $2,500 "People's Car" is a natural fit for India, but don't expect rivals to match it

By David Welch and Nandini Lakshman, with Ian Rowley in Tokyo





This Indian family of six could be ready for an upgrade. Kevin Lee/ecopix Fotoagentur


Forget about sleek styling, a powerful engine, or electronic gadgets in the dashboard. Gurdeep Randhawa is lusting after a bare-bones car that'll soon be available in India. The 39-year-old mill manager in a Mumbai suburb buzzes to work on a $1,350 scooter and piles his wife and two kids on it for weekend outings. But he may soon replace that hazardous family hauler with a $2,500 car Tata Motors (TTM) expects to offer this fall. "It's affordable," Randhawa says, patting his wallet.


It's not just Indian scooter drivers who are eager to see what Tata comes up with. Virtually every automaker on earth will keep a close eye on the Indian Auto Show in New Delhi, where Tata plans to introduce what it's calling the People's Car on Jan. 10. The industry is looking to emerging markets for growth, and many companies are gearing up to build cars that can be sold at rock-bottom prices—in both developing countries and more established markets. Toyota (TM) and Volkswagen's (VLKAY) Skoda subsidiary are planning small cars for India. Suzuki says it will soon cut the price of its cheapest model in India. And Renault-Nissan has teamed up with Indian motorcycle maker Bajaj Auto to launch a $3,000 car next year. "If Tata can do it, we can do it," says Renault-Nissan Chairman Carlos Ghosn.


Can they really? Many auto executives say it's almost impossible to build a car at the price Tata is talking about. Established players' engineering and labor costs are far higher, and few are interested in a car that generates the slim margins Tata is likely to earn. Furthermore, regulators in developed markets wouldn't let such a stripped-down car on the road, and consumers probably wouldn't want to buy it. To succeed, "it has to be more attractive than a used car that sells for the same price," says Nick Reilly, General Motors' (GM) chief for Asia.


Tata won't release the details of the People's Car until the New Delhi show. But the company and industry sources say Tata has kept costs down with such spartan appointments as a dashboard that features little more than a speedometer, fuel gauge, and oil light. The car will lack basics such as reclining seats, a radio, and power steering, and will have a 650cc engine that puts out at most 70 horsepower—about what the Yugo had when it was introduced in 1986—but gets 50 to 60 miles per gallon. The ride, meanwhile, could be a tad rough. Tata will use basic shock absorbers up front, but the rear suspension design dates back decades.


Tata's real advantage may be in development costs. India has top-notch engineers, but they're paid about a third what their counterparts in Detroit earn, according to GM, which has a technical center in Bangalore. Engineering a top-selling model costs about $350 million in the West, but could be about 20% of that in India, estimates Detroit consulting firm AlixPartners. That could mean savings of $300 to $1,000 per car. And factory hands in Mumbai earn just $1.20 an hour, less even than auto workers in China. Tata "will set a benchmark" for the industry, says Stefano Aversa, co-president of Alix.


Tata will also save with an innovative distribution strategy. The company plans to supply kits to dealers who will do the final assembly. While other carmakers use kits in emerging markets, assembly is done at big centralized factories that churn out thousands of cars a month. Tata, by contrast, expects the cars to be built in small workshops. That will save Tata money, since distribution and retail account for roughly 20% of a car's sticker price in the U.S. While it's a strategy that bigger carmakers with less extensive operations in India would have trouble matching, it could also lead to serious quality issues since there will be far less oversight of manufacturing.

[architect]

Continuation of article...

CUTTING CORNERS

The biggest hurdles to selling such a car in the West would be its technology. Tata will save about $900 per car by skipping equipment that the U.S., Europe, and Japan require for emissions control, says James N. Hall, principal of 2953 Analytics, a consulting firm near Detroit. And Tata will forgo features such as antilock brakes, air bags, and support beams that protect passengers in a crash. "It's safer than putting four people on a scooter, but that's it," says Sandy Munro, president of Troy (Mich.) consulting firm Munro & Associates, which has advised Tata on manufacturing the car.

Even if Tata's offering wouldn't cut it in the U.S., the company will put pressure on the world's biggest carmakers. Tata intends to focus initially on India and then other developing markets, where it could cut into the expansion plans of the industry's leaders. Later, Alix Partners estimates, Tata could build a car that would meet U.S. or European specifications and sell for about $6,000—still a bargain in either market. Tata has no immediate plans to do so, but with its ambitious chairman, Ratan Tata, close to buying Jaguar (F) and Land Rover (F) and pushing his own brand elsewhere, don't be surprised to see something inspired by the People's Car on a highway near you soon.

[jpdm]

I agree with the article. First things first, built a quality car for the masses first. Focus on its utility and functionality. Those add-ons such as anti-brake system, accessories, airbags, leather seats, safety accessories, crash rating etc..( OA na yan. Sa sobrang traffic dito.For instance, yung Saguisag case, khit kilala sa safety yung vehicle nila, ala din.Nasa driver talaga at strict enforcement of traffic laws) are not that essential for the working masses and the transport, utility,hauling and passenger industry.

What we need is a basic workhorse just like the owner-type jeeps, norkis legacy first, jeepneys, local auvs, the new MVPMAP PHUV, Anfra AUV and soon to be Tsikot PHUV.

The driver is the best safety gadget.

We must come up with our own vehicle just like India so that will not be at the mercy of local and foreign oligopolists.

[pitbullz]

http://news.bbc.co.uk/2/hi/business/7180396.stm

http://www.tatamotors.com/our_world/...40&action=Pull

3 tata cars = 1 hyundai getz...pwede nko magnegosyo as mini taxi operator nito.
mukha syang paa ni voltesV

[suv]

Sa mga nagmomotorcycle ito na lang bilhin nyo......

Pwede pamalengke ng mama ko ito ah.....Kahit iharabas nya hindi gaano nakakainis....

[Syuryuken]

Dalhin kaya dito?

[pitbullz]

http://paultan.org/archives/2007/10/...ta-1-lakh-car/
some more news...

SANDALI LANG PO CORRECTION!
nahihiya ako sa arithmetic ko...lumalabas na Php100,000+ lang pala ito at current exchange rate...

para pala syang honda minica noon. alam ko 2cylinder din sya.
nationalism and selflessness can lead to great things...sana mga politiko natin matuto nitong 2 values na ito.

ok ito para sa mga nagmomotor. bumili sila nito nang maranasan naman nila yun sakit ng ulo na binibigay ng mga pasaway na riders sa atin hehehe nang malaman nila! out with those pesky pedicabs and noisy(plus bastos)tricycle drivers!

[mazdamazda]

Ummm... it's not for export.

[pitbullz]

Dalhin kaya dito?

meron daw. at 20% interest. araw araw ang singilan
joking aside. maganda ito para sa mga kaibigan nating indian-preneurs...imbis na magmotor sila mag tata na lang sila. safe pa sila sa holdup. pwede pa sila makinig sa latest na bollywood hits