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Tata Displays World's Cheapest Car

Thu, 01/10/2008 - 8:52am
Gavin Rabinowitz, Associated Press Writer
NEW DELHI (AP) — India's Tata Motors on Thursday unveiled the world's cheapest car, bringing new mobility within the reach of tens of millions of people and nightmares to environmentalists, traffic engineers and safety advocates.
 
Company Chairman Ratan Tata, introducing the Nano — price tag $2,500 — during India's main auto show, drove onto a stage in a white version of the tiny four-door subcompact, his head nearly scraping the roof.
 
With a snub nose and a sloping roof, it can fit five people — if they squeeze. And the basic version is spare: there's no radio, no passenger-side mirror and only one windshield wiper. If you want air conditioning to cope with India's brutal summers, you need to get the deluxe version.
 
But it's cheap. The Nano's closest competitor here is the Maruti 800, a four-door that sells for nearly twice as much.
 
Tata, however, is targeting people moving up from the lower ends of India's transportation spectrum, where two-wheeled scooters selling for as little as $900 are often crammed with entire families.
 
While the price has created a buzz, critics say the Nano could lead to possibly millions more automobiles hitting already clogged Indian roads, adding to mounting air and noise pollution problems. Others have said Tata will have to sacrifice quality and safety standards to meet the target price.
 
The chairman, though, insists the car will meet safety standards and pollute even less than motorcycles, passing domestic and European emission standards and averaging about 50 miles per gallon. Girish Wagh, who headed the design team, said it had an oxidation catalytic convertor and it emitted 120 grams of carbon dioxide per kilometer.
 
Chief U.N. climate scientist Rajendra Pachauri, who shared last year's Nobel Peace Prize, said last month that ''I am having nightmares'' about the prospect of the low-cost car.
 
''Dr. Pachauri need not have nightmares,'' Ratan Tata said at the unveiling. ''For us it's a milestone and I hope we can make a contribution to the country.''
 
The basic model will sell for 100,000 rupees, but analysts estimate that customers could pay 20 percent to 30 percent more than that to cover taxes, delivery and other charges.
 
Tata has long promised that he'd create a 100,000-rupee car, a vow that was much-derided in the global industry but created a frenzy in India. On Thursday, nearly every media outlet in India focused on the live unveiling.
 
''A promise is a promise,'' Tata told the crowd.
 
The car has seat belts, but no air bags. The Nano is about 10 feet long, 5 feet wide. The 2-cylinder petrol engine delivers 33 horsepower and a top speed of just over 60 mph.
 
Ford's Model T, which debuted in 1909 for $825, had a 4-cylinder, 20 horsepower engine with a top speed of 45 mph. The Model T had fuel economy between 13 to 21 miles per gallon.
 
Tata has said they expect the car to revolutionize the auto industry, and analysts believe the Nano may force other manufacturers to lower their own pricing. French auto maker Renault SA and its Japanese partner, Nissan Motor Co., are trying to determine if they can sell a compact car for less than $3,000.
 
For now, the car will be sold only in India, but Tata eventually hopes to export it. The Nano could become the basis for other similar super-cheap models in developing markets around the world.
 
As rising middle class incomes drive demand for cars in India, automakers expect the ranks of car owners in the country to expand dramatically in coming years.
 
But for some, a huge influx of cars is a terrifying prospect of traffic jams at midnight, hours-long commutes and increasing pollution.
 
''If you're talking about urban environment, it will cause serious problems,'' said Jamie Leather, a transport specialist with the Asian Development Bank. ''It's a major concern.''
 
In 2005, Indian vehicles released 219 million tons of carbon dioxide, the leading greenhouse gas blamed for global warming.
 
By 2035, that number is projected to increase to 1,467 million tons, due largely to the expanding middle-class and the expected rise of low-cost cars, according to the Asian Development Bank.
 
''The cheaper and cheaper vehicles become, the quicker those pollution levels will increase,'' Leather said.
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