In a few hours from now, Tata Motors – the prospective owner of Jaguar and Land Rover, will unveil the world’s cheapest car. With this small car, TATA is trying to achieve something which has eluded many car manufacturers in the past. The previous efforts tuned out to be damp squibs with either poor passenger comfort or questionable durability or both. When TATA set out to build a sub $2500 car, which is fondly called the one lakh car in India, their goals were pretty clear: a car which is bigger, safer and more fuel economical than the Maruti 800, the cheapest car in Indian market. Note that the Maruti 800, once the largest selling car in Indian market, costs $5000 upwards. That means TATA had a real challenge at hand.
If rumors are to be believed, TATA has achieved what no other auto manufacturer has done in the past. Not only they are successful in creating the car, they are going into mass production in just months from now.
There are people who believe that this could create major problems in the Indian roads as more people will now be able to afford cars. This is a very negative way of seeing things as traffic congestion is a problem that the local government needs to solve, not TATA motors. Needless to say, with this car, the small car unit of TATA will be surviving on a wafer thin margin and won’t be making a lot of cash, which makes it clear that profitability is not the motivation behind building it.
There will be other interesting outcomes one this car goes into production. While the word on the street is that this car will give other manufacturers like Maruti a run for their money, I beg to differ. It is Bajaj, makers of the ubiquitous 3 wheeled auto rickshaws on the Indian roads, who will be the most affected. It is very likely that the TATA’s small car will turn out to be an interesting alternative for the auto rickshaws as the price difference is negligible, just like the way the Indica replaced the venerable Ambassador as the preferred Taxi vehicle. Another possibility is that the number of houses which own two cars will increase manifold. I already hear from a lot of my friends and colleagues who say they they will buy this as a second car for their wife or children.
TATA will unveil this car at the Indian Auto Expo which is just hours away from the opening ceremony. The whole nation is waiting for the unveiling of the car, which has sidelined the other important launches like Skoda’s Fabia hatch and TATA’s own Fiat Linea launch. Personally, I am eagerly looking for the Linea’s launch as it could turn out to be my next car.
