Indian Automaker Presents World's Cheapest Car

Wahington DC August 23, 2007; The AIADA newsletter reported that Tata Motors, India's largest four-wheel automaker, is planning to capitalize on the country's expanding middle class by releasing the Rs One Lakh.

Its sticker price of about $2,500 would make it the world's cheapest car.

According to MSNBC, India is an automaker's paradise. Only eight Indians out of every thousand own a car, compared with about 750 per thousand in the U.S.

Hero Honda, the world's largest two-wheel-vehicle maker, estimates that 30 million to 40 million people join India's middle class annually.

"The potential for that car to sell in large numbers is huge," says Manishi Raychaudhuri, a UBS analyst. "In India, the penetration of four-wheelers is very low. So naturally there's some status attached to having a real car — it's kind of a showpiece."

Tata currently earns about 17 percent of its revenue from exports. Tata may eventually roll out the Rs One Lakh in other developing nations, but it has no North American ambitions.