Tata plans cheapest-ever car for Indian market
Tata, the Indian conglomerate and one-time MG Rover partner, is developing plans for what will be the world's cheapest car. (News)
To be launched in 2008, the 'people's car' will cost just 100,000 rupees (pounds 1,300) and is set to become the Model T Ford for the 21st century.
The vehicle will be aimed at the Indian market where car ownership is low. Tata hopes to price the car cheaply enough to tempt people off their bicycles and motorcycles and on to four wheels.
The project is the brainchild of Ratan Tata, chairman of India's largest conglomerate. He plans to defy his many critics, who claim that a car cannot be mass-produced so cheaply.
While the car will hardly be sporty " with an engine expected to be around the 600cc mark " Mr Tata has told his designers that the vehicle must not be seen as a stripped-down version of a normal car. (Car News)
To keep costs to a minimum, many of the body parts of what is known as the '1 Lakh Car' will be made out of plastic. And Tata is exploring the possibility of selling the car in kit form, with final assembly of the vehicles to be completed in rural workshops in India.
The designs for the car remain on the drawing board. A Tata spokesman said: 'The car is still in development. Because car ownership is so minimal in India, it will be aimed at this market.'
Paul Newton, automotive expert at the research group, Global Insight, said: 'Tata's strategy is to get people off their Honda bikes and into cars. India is a unique market as the market for cars under $10,000 [pounds 5,600] accounted for 70 per cent of the growth last year.'
Last year there were more than one million cars sold in India. The growth in sales has been fuelled by rising disposable incomes and the willingness of India's banks to lend money for car purchases.
While small, cheap cars are the big driver in the Indian market, luxury car makers such as Mercedes-Benz are also targeting the country's increasingly affluent middle class.
Tata's ambitions to make an ultra-cheap car have been called into question by its rivals. One of the doubters is India's largest car maker, Maruti Udyog, which currently makes the subcontinent's cheapest and best-selling car, the M800, selling for around 200,000 rupees.
Korea's Hyundai has also raised questions about Tata's plans.
The spokesman for Tata said that the company had no plans to sell the 1 Lakh Car in the UK.
Nevertheless, it is understood that it is considering launching new models in the UK on top of its limited range of mainly commercial and 4x4 vehicles.
In 2003, Tata formed a partnership with MG Rover, which saw an Indian- built car rebadged as a CityRover. But the car was panned by its critics for being unsophisticated and, as a result, it failed to sell in large volumes.
Tata does, however, have a major stake in the UK consumer market as the owner of Tetley Tea, which it bought five years ago for pounds 271m.
Copyright 2005 Independent Newspapers UK Limited (Online News)
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