Posted on 01/12/2008 4:25:35 PM PST by 2ndDivisionVet
While there might not be much upside to Tata Motors’ intended purchase of the luxury Jaguar and Land Rover marques, the Indian giant’s decision to build the world’s cheapest car looks like a supercharged business decision.
Numbers released yesterday by the industry giants underline the potential with General Motors revealing that vehicle sales in China rose 18.5% last year to a record 1.03mn and Toyota saying it smashed targets with a 62% increase in the world’s fastest growing country. In spite of this impressive growth by the big two in China, only 0.1% of the population owns one of their cars and Toyota plans to chip away again this year with a target of 700,000 sales, up from 499,000 in 2007. Tata’s new Nano has a dealer price of 100,000 rupees ($2,500), which enables the company to tap vast markets at home as well as in China and Russia.
Environmentalists are creating a stir because the prospect of millions of people swapping public transport, motorbikes and bicycles for a gas-guzzling car is anathema to them. But a quick glance at the airline industry during the past two decades when low-costs flights went supersonic suggests protests will make not the slightest difference.
Of more significance, though, is the ability of the burgeoning big cities in Asia to build an infrastructure that will accommodate new swathes of motorists.
Urban planners are either scratching their heads or tearing up existing plans. Bangkok resembles a vast parking lot on most business days so at least they can learn from others’ mistakes if it is not already too late.
Those concerns aside, it is another example of the rising tide of consumerism in China and India that is trampling over any carbon footprint strategy the developed world is seeking to devise. It was probably wise planning by Tata to unveil the Nano in the New Year rather than a few weeks ago when the world was addressing climate change in Bali.
And it is no surprise that Tata’s rivals are scurrying to enter the Indian market with low-cost models in the next few years, but ceding first-mover advantage is always a formidable hurdle to overcome in business. One only needs to look at the mountain of free publicity the car has generated over the past few days to understand why.
Mass production of electric cars and vehicles that run solely on alternative fuels continues to make no economic sense for manufacturers even as they continue to spend heavily on research and development.
For them, entry into a market that is about to go into overdrive is a much preferred route. One thing is certain, Al Gore, the King of Green, is unlikely to swap his expensive hybrid car for a Nano that can travel 20km on a litre of fuel.
Can’t say I’d ever get in one.
I like big TaTas.
At this time it beats anything else...
GM lives!
That’s a gas guzzler?
This car won’t sell like hotcakes. The hotcakes sales figure will be surpassed in the first three months. Brilliant engineering.
un-included are heater, defroster or ability to move in snow.
Gosh, that's, umm, like getting the same fuel economy for a vehicle that costs one tenth the price.
I think this one will become a textbook example of brilliant business strategy, from finding a market, to the engineering that made it possible, to the risk taking and entreprenurial spirit of the management. This is a market changing/society changing product.
It reminds me of those motorized rickshaws that are basically just a motorcycle with a little 2 seat cab. I wouldn’t be surprised if that was the inspiration for the Tata.
Absolutely is - look at her zero government mandate exterior, the lack of a fleet mileage standard. Look at the lack of government dollars poured into research to make it work.
Private enterprise is always beautiful. Environmentalists will, of course, be ticked about that.
Well, it certainly won’t sell like samosas, anyway. Nothing can.
That is a big part of the reason that engine capacities above 100 cc are progressively and heavily taxed in Viet Nam. Without the taxation, the cars that would now be on the road would render the roads and streets pretty much useless for getting anywhere. The motorbikes in Sai Gon move far more people a lot more quickly than do the cars in D.C.(absolutely and per vehicle) and there is never gridlock. Viet Nam is upgrading its highway system rapidly but the number of 4-wheelers is catching up to capacity fast, even with the huge tax.
Hell that’s a keys golf cart!
$2500 for the car + $2500 per year just to keep it running.
I’m sure a $2500 car is worth every penny.
What is a samoso?
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