Tata's Rs 1-lakh: The cheapest car in the world

The automobile industry might take a new course when the first ultra cheap car is rolled out of the assembly plant. At least, that's what Ratan Tata, chairman of the Indian manufacturer Tata Motors, is hoping to happen.

The car, currently known as the Rs 1-lakh car in India, will make its first public appearance in six month's time, during the Auto Expo 2008 in New Delhi. Those who have seen the prototype say that this Tata model resembles the Daewoo Matiz (picture above). Some technical specifications have been published by now; for example, Tata announced that its diesel engine will have 667 cc of power, and the structure will contain iron, alloys and plastic components - although they didn't specify in what proportion will they use each type of material, but we can expect to have much more plastic than usual, as Tata is trying to make the car as light as possible in order to reach maximum fuel efficiency.

Tata's plans are ambitious: the company wants to sell about 1 million units per year, which almost doubles the current annual sales of cars in India. However, they think that the price of their milestone car will be a key factor to achieve their goal. The price is expected to be the equivalent to $2,500 US Dollars. They are aiming to convince a fair amount of two-wheeler buyers in India (who purchase 7.5 million units annually) to switch to Tata's new model.

Not everything is so positive in Tata's plans. Many people have been wondering about the reliability of the new car; its low price could mean low quality components as well, and some safety devices, such as airbags (which are not mandatory in India) will be likely sacrificed. Also, Some NGOs have started to let their concerns out about the model, arguing that, should the car be as successful as Tata thinks, it will easily cause permanent traffic jams in the (still developing) Indian road system. Moreover, the consumption of diesel will soar, possibly causing increases in fuel prices and extreme pollution levels.

Still, lots of people in India are excited about the idea, and they are enthusiastically looking forward to buying the new car. If Tata's proves to be successful, this kind of model would probably be imitated by larger manufacturers in other countries and we could expect to have similar models all around the globe in some years. But the plan fails, Tata will take a long time to recover. It is an interesting challenge for the giant Indian consortium indeed.

Click here to read the original article from businessworld.in
Special thanks to Kirti for the info for this post.