India's Tata Unveils the Nano; World's Cheapest Car

NEW DELHI, Jan 10, 2008; Rina Chandran writing for Reuters reported that India's Tata Motors Ltd unveiled the world's cheapest car on Thursday, bringing car ownership closer to millions of consumers in emerging markets.

The 4-seater Nano, with an engine around 625cc, will have a dealer price of 100,000 rupees ($2,500) -- about half the cost of the cheapest car on today's market, a 25-year old model from rival Maruti Suzuki.

The Nano will go on sale later this year, the company said.

"Let me assure you and our critics the car we have designed will meet all safety norms and all foreign environmental criteria," Chairman Ratan Tata said as he proudly unveiled what had been dubbed the "People's Car" at the Auto Expo in New Delhi.

The compact but curvy Nano stands in sharp contrast to the luxury Jaguar and Land Rover brands that Tata is negotiating to acquire from Ford Motor Co (F.N: Quote, Profile, Research).

Hundreds of people crowded into the pavilion to see the long-awaited launch, standing on chairs to get the best view as Tata introduced and then drove the car onto the stage in a media circus more worthy of a pop concert or an Oscar ceremony.

Tata planned the car years ago as a safer and affordable alternative for the millions who often ferry families of four, plus baggage, on motorbikes and scooters.

The car arrives at a time when oil has topped $100 a barrel, the move to fuel-efficient "green" cars is gaining momentum, and a wave of nostalgia has spurred sales of brands such as BMW's Mini and the Fiat 500 Cinquecento.

Tata said the car would have a rear-mounted engine and travel 20 km per litre. It would be offered in a basic model and two deluxe variants.

Tata has said it will initially produce about 250,000 Nanos and expects eventual annual demand of 1 million units.

It has sent global car makers scurrying to make their own version of a low-cost car to meet the needs of cost-conscious consumers in emerging economies such as China, India and Russia.

Ford this week said it would build a small car in India within two years, while the alliance of Nissan Motor and Renault, which has made a big success of its no-frills Logan sedan, plans a $3,000 car with India's Bajaj Auto.

Volkswagen, Toyota, Honda and Fiat have also said they are looking at small cars for emerging markets where strong economic growth has made car ownership a reality for millions.

Tata said it would focus on the home market for 2-3 years before considering exporting the Nano to countries in Africa, Latin America and Southeast Asia.

With just 8 people in 1,000 owning a car in India, there is huge potential to upgrade bike and scooter owners, who bought about 7 million two-wheelers in 2006/07.

Specifications of the Tata Nano

Following are some details on the car, which was presented at the Auto Expo in New Delhi.

* Length: 3.1 meters

* Height: 1.6 meters

* Width: 1.5 meters

* Engine: Rear-wheel drive, 2-cylinder, 623 cc, multi-point fuel-injection petrol engine. Engine is rear mounted. Tata said it was the first time a 2-cylinder gasoline engine was being used in a car with single balancer shaft.

* Safety: Tata said the Nano has an all sheet-metal body, with safety features such as crumple zones, intrusion-resistant doors, seat-belts, strong seats and anchorages, and the rear tailgate glass bonded to the body. Tires are tubeless.

* Environment: Tata said tailpipe emission performance exceeded current regulatory requirements, and the Nano had a lower overall pollution level than two-wheelers made in India. It said high fuel efficiency (20 km/liter) ensured low carbon dioxide emissions.

Compiled for Reuters by John Mair in Mumbai, Editing by Mark Williams/Ian Geoghegan