Tata Nano: World's cheapest car unvielled

Tata Group chairman Ratan Tata on Thursday unveiled the Tata Nano at the 9th Auto Expo in New Delhi.

Ratan Tata, while unveiling the nano, said: "The car will meet all current safety norms and all emission criteria. The pollution it will cause will be lower than 2-wheelers."

The car, Tata said, is smaller than a Maruti [Get Quote], but has 21 per cent more volume or space inside than the 800. He said that the dealer price of the car will be Rs 1 lakh, plus value-added tax (VAT) plus transport charges.

The car will have a 624-cc petrol engine generating 33 bhp of power. It will sport a 30-litre fuel tank and 4-speed manual gearshift. The car will come with air conditioning, but will have no power steering. It will have front disk and rear drum brakes. The company claims mileage of 23 km per litre.

The car's dashboard features just a speedometer, fuel gauge, and oil light. The car does not have reclining seats or radio. The shock absorbers are basic.

Nano, the world's cheapest car, costs almost half of the cheapest car currently available anywhere in the world.

''Since, a promise is a promise the standard dealer version will cost Rs 1 lakh,'' said Tata Sons chairman Ratan Tata.

He informed that the car is 8 per cent smaller bumper to bumper, than the Maruti800 but at the same time 21 per cent larger in its interiors and can sit up to four people.

Dispelling myths that the car was not safe enough Tata said, 'The car has passed the full-frontal crash and the side impact crash''. He also side stepped emission concerns and said the car will meet Euro IV norms.

While critics had been sceptical throughout about the car meeting safety and emission norms, coming as it is at that price, Tata said he was happy to announce that Nano meets all norms as would a modern car.

The car is eight per cent shorter than Maruti 800 on bumper to bumper length, but is 21 per cent more spacious, claimed Tata.

Alluding to fears expressed by environmentalist R K Pachauri and green activist Sunita Narain that the car at that price would add more vehicles on the road leading to higher vehicular pollution, Tata said the 624 cc, 33 HP petrol engine meets Bharat Stage-III emission norms and can also meet the Euro 4 norms.

"Pachauri will not have a nightmare and Sunita Narain can also sleep," he quipped, while recalling that some people had suggested that the car should be called 'Pachauri' and some others said that it should be named 'Mamta' � probably referring to the position TMC leader Mamta Banerjee had taken against the setting up of the small-car project at Singur in West Bengal.

Commenting on the safety standard, he said the car has gone through a full frontal crash test as per norms.

The Nano will come in three variants -- standard and two deluxe models with AC. The standard car would be available for Rs 1 lakh (ex-showroom), while VAT and transportation costs are extra.

The Nano is expected to be commerically launched in the second half of 2008. News reports say that Tata Motors [Get Quote] hopes to sell 500,000 units of the car, almost four times the number of Indicas it sells. Tata plans to focus on a market segment hitherto untapped.

Not since the launch of the Maruti 800 in 1983 has any car gripped the imagination of a nation and indeed car manufacturers the world over so intensely. If commercially successful, the Tata Nano can alter the passenger car market in India, and perhaps the world, beyond description.

Why critics of the Tata small car are barking up the wrong tree
http://www.domain-b.com/companies/companies_t/Tata_Motors/20080110_tata_small_car.html

Vivek Sharma 10 January 2008

"India is in serious danger", warned the hugely popular New York Times columnist Thomas Friedman last November in one of his columns. The danger, he said, is from the $2,500-Tata small car which he believes is a highly retrograde initiative from a country capable of incredible innovation.

Why is Friedman so worried about a car that may never be seen on American roads? Because, he is very concerned about the well-being of us Indians! He is worried that we will make an even bigger mess of our road traffic and pollute our way to motoring bliss. He even asked Americans to urge Indians not to imitate the indulgent American way of life, but leapfrog and invent 'cheap-scale', sustainable solutions to big problems like public transport.

On the face of it, the column reads like yet another patronising sermon from a westerner baulking at the thought of third world masses enjoying cheap personal transport the way Americans do. But Friedman, a three times Pulitzer price winner, is unlikely to harbour any prejudice against India and Indians.

After all, one of his biggest claims to fame is a true 'eureka moment' when it dawned on him that 'the world is flat' - while playing golf in Bangalore! The picture of Bangalore he paints in that book, with gleaming skyscrapers housing development centres for Microsoft, Sun and Oracle adorning his view from the golf course, would easily beat BJP's old 'India Shining' campaign.

Tom Friedman is not alone in deriding the Tata small car.

Ever since Ratan Tata announced his intention to build the cheapest car ever, there has been no let up from a variety of Tata baiters. Some competitors ridiculed the idea and questioned the company's ability to launch a car at such a low price. Green activists and 'concerned' souls, much before it caught Friedman's attention, have been warning us of the terrible fate that awaits us if the small car becomes a reality. Their objections range from vehicle safety to pollution and some of them sound plain elitist in their arguments.

The elite who pretend to be liberals
Last year, a columnist in a major Indian financial newspaper wondered how this country could allow a product like the Tata small car that would make our urban lives messier and all the more tedious. This is one of the biggest complaints against the Tata small car. But the question is, messier and tedious for whom? Obviously the urban rich, for the lives of the urban lower middle class and the poor cannot be made any messier! So, those who cannot afford more expensive cars must stick to their motorbikes so that the rich can continue to enjoy comfortable rides in thin traffic!

Another curious argument is that most of the potential buyers of the Tata car would have no parking space at their homes. So, it is said, they will all start parking their puny little cars by the roadside and clog traffic. A car manufacturer cannot be asked to sell to only those who have their own parking space. It is the potential buyers' problem to find a safe parking space. If they cannot find adequate parking space, or find parking to be very expensive, they will not take out their cars very often or will abstain from buying them in the worst case.

Given our 'highly developed civic sense' and 'ready willingness to obey the rules', it is likely that many of the new small car owners would conveniently park their vehicles where they should not. But, doesn't that happen even now with those who can afford expensive cars? It is the rich who flout traffic rules more blatantly and it is very likely that cars left at 'no parking' areas will be the most expensive ones because they know the traffic policeman will usually not dare to touch the 'sahib's gaadi' (vehicle).

When that is the case, this argument smacks of blatant elitism. The less affluent cannot be denied the safety and comfort of a cheap four-wheeled vehicle, only because the existing infrastructure will come under further strain. Any move to restrict the number of cars should apply to all vehicles, irrespective of their cost. Even then, it should be ensured that the costs of such measures - like increased road taxes and parking charges - should be proportionate to the owners' ability to pay. Anything else will be discriminatory and simply unfair.

The safety bogey
Another potential fault critics have come up with is safety. "When you lower prices that drastically, how will you be able to meet safety standards?" - Anumita Roychoudhury of the Centre for Science and Environment (CES), one of the most-quoted critics of the Tata car, is reported to have asked. Does she really believe that there are no safety standards for vehicles in India? Even if they are inadequate, are we supposed to believe that a manufacturer from the House of Tatas, would risk its reputation and compromise on safety just to cut costs?

Even if the Tata small car is deemed less safe in terms of passenger injuries in the event of a collision, we need to remember that nobody in their right senses would enter such a car in a drag race! Neither will any sensible driver try to test the car's speed limit on our dangerous highways. Most potential buyers, ordinary middle class buyers, will drive the car to work or take their families for an outing on weekends.

Is the probability of high speed collisions on our city roads, where the average speed is in the range of 20 to 30 kmph, so high? In high-speed highway collisions, will the passengers in other small cars like the Maruti 800, Alto or even a Santro fare any better?

Furthermore, won't the Tata small car be far safer for lower middle class families who now use motorcycles and scooters with only the rider wearing a safety helmet in equally "dangerous" traffic conditions?

Roychoudhury has also argued that the Tata car has "not much chance" of retaining its price tag when safety features like airbags and anti-lock brakes are made standard in all vehicles. It is Ratan Tata who should worry about that, not his detractors. Oh! Shouldn't his critics be happier if the car becomes costlier and beyond the reach of its target customers!

The pollution bogey
R K Pachauri, with all the added gravitas from the Nobel Peace Prize, said the Tata small car is giving him "nightmares" - presumably implying the environmental impact of emissions from more cars on our streets. He is one of the biggest stars of the global warming campaigners, second only to Al Gore, and it is understandable that he gets nightmares. Just when he and his scientists and experts had convinced the sceptics that global warming was for real, here is a company from his own country, which he believes, is hell bent on worsening the problem!

Roychoudhury of CES is worried that "we have a time bomb ticking away" in terms of the environmental impact of hundreds of thousands of Tata small cars that will flood the streets in the coming years. Others are no less appalled or frightened. But, how real is the potential pollution problem posed by the Tata small car?

Ratan Tata has said that the car's emissions will be comparable to two-wheelers on a per passenger basis. That is assuming that the car will always have four passengers, which is unlikely. So, if the car replaces as many two-wheelers on our roads, total emissions will undoubtedly be higher.

But there is a potential upside, too. The Tata small car is said to be twice as fuel-efficient as other small cars. So, if some of the existing and potential owners of other small cars switch to the new car, the increase in overall fuel demand and emissions will be lower.

Again, it is not that millions of Tata small cars will be rolled out every year. Tata Motors' current capacity is 250,000 units per year, which is less than a quarter of the total cars produced in the country. In the long run, yes, the number of Tata small cars on our roads could be in millions. But, the number of other small car models sold over a period of as many years will also run into millions. Then, why single out the Tata car for criticism?

The Tata small car will definitely increase the pace of passenger car sales. But, the incremental addition to total car sales may not be as high as it is being made out to be. On balance, potential emissions are not the "nightmare" critics want us to believe.

The traffic chaos bogey
More cars on roads definitely mean more congestion. But, will the Tata small car make it that worse as some fear? It is estimated that there are over 12 million vehicles in India - four wheelers and above. Around a million are being added every year, and the additions will only increase. If Tata Motors sells as much as it can produce, we will see 250,000 cars being added every year. By the time the company reaches full capacity, at the earliest in 2009-10, total number of vehicles will be around 15 million. In percentage terms, the Tata small cars will constitute less than 2 per cent of total vehicles on our roads. Even if the company doubles its capacity, it will still be less than 4 per cent. Is that a big problem?

Our roads are congested in urban areas, not so much in semi-urban and rural areas. It is likely that a substantial number of Tata small cars will be sold in areas where the road traffic is not that bad. So, should the village aam aadmi (common man) also be denied a cheap personal vehicle?

Even if the Tata small cars create utter traffic chaos in our cities, it may be a blessing in disguise. The transport infrastructure in our cities is pathetic probably because our netas (politicians) never have to suffer traffic blocks. The big shots, who take all the decisions, have police vehicles clearing the way for them.

The lesser minions, who lobby to influence the decisions, are usually chauffeured around and hence commuting is less tedious for them. So, to take a highly charitable view on our netas , it is possible that they are really not aware of the problems. When we protest loudly, they will agree to 'look into the matter', without really grasping the enormity of the problem and hence cannot be blamed for forgetting the promise.

But, they will grasp the problem better and will be forced to 'look into it' if their cars cannot move. For them to roll down their windows and see reality, the traffic should become so bad that even police vehicles cannot clear the way. Then they will do something about our roads or let the private sector do it.

I am all for mass transport systems - metro rail systems, high capacity buses on dedicated lanes and so on - for our cities. Many commuters would prefer public transport to driving their own cars, provided they are safe, comfortable and reliable. There is no doubt that, in the not too distant future, a majority of city dwellers will switch to public transport from cars. Because it will be impossible to take out the cars daily and our public transport systems would have improved beyond recognition by then.

But, that will be a gradual transition. All we can do is to exert pressure to speed up the process, and that is what all the activists railing against the Tata small car should be doing. Until we have better public transport, commuters would prefer personal transport - if they can afford it - and there will be huge demand for personal vehicles. You cannot fault a business for trying to meet market demand, in a supposedly liberalised economy. If the Tatas had not done it, somebody else would have. Bajaj already has a prototype ready!

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