Tata set to launch cheapest car
Monday, 31 December 2007
NEW DELHI, Dec 30 (AFP): India's giant Tata Group plans to launch the world's cheapest car early in January while also looking set to drive off with two of the poshest marques-
Ford's iconic Jaguar and Land Rover brands.
Ratan Tata, head of the tea-to-steel Tata conglomerate, will unveil the "People's Car" January 10 at a New Delhi auto show that will carry a sticker price of 100,000 rupees, or 2,500 dollars, which some analysts say could revolutionise automobile costs worldwide.
And Tata, which has been on an aggressive overseas expansion drive, is also expected to win its reported two-billion-dollar bid for the British Land Rover and Jaguar brands in January-putting it in the unusual position of making two prestige cars as well as the world's lowest-cost automobile.
The cheap car, a pet project of Cornell-trained architect Ratan Tata that he helped design, is aimed at getting India's masses off their motorbikes and into cars.
"I hope to make a contribution to making life safer for them (the masses)," said reclusive tycoon Ratan Tata, who has spearheaded the growth strategy of the company known for its philanthropic values and paternal management style.
But despite its low price and safety factors, analysts say the four-door, five-seater could be a tough sell for Tata's vehicle arm, Tata Motors, even with an economy growing by a scorching nine per cent, creating new affluence.
If motorbike owners wanted to graduate to cars, there are a lot of good second-hand cars for 100,000 rupees or less, analysts say.
"It will not be an immediately profitable venture, it will take a longer time to break even-at least three years," said Angel Broking analyst Vaishali Jajoo.
Tata has said it's targeting the car at Indian and eventually other emerging markets. A Tata Motors board member recently revealed the car would get a significant 25 kilometres (15.5 miles) per litre.
"Acceleration wise, it's the same as a Maruti 800," board member R.A. Mashelkar said, referring to the most popular budget model made by Japanese- owned rival Maruti Suzuki that sells for 4,800 dollars.
"The projected expenditure of Tata Motors and suppliers on the project is 25 to 30 billion rupees. Half of that amount is what Tata Motors would spend."
Tata Motors is taking on the challenge at a time when its share price has slid some 20 per cent this year due to a decline in its vehicle sales.
If the cheap car is a winner, environmentalists fear it will further congest India's clogged roads and add to choking pollution.
But Tata says the car will create no more pollution than a motorbike and is confident of its success.
Ford's iconic Jaguar and Land Rover brands.
Ratan Tata, head of the tea-to-steel Tata conglomerate, will unveil the "People's Car" January 10 at a New Delhi auto show that will carry a sticker price of 100,000 rupees, or 2,500 dollars, which some analysts say could revolutionise automobile costs worldwide.
And Tata, which has been on an aggressive overseas expansion drive, is also expected to win its reported two-billion-dollar bid for the British Land Rover and Jaguar brands in January-putting it in the unusual position of making two prestige cars as well as the world's lowest-cost automobile.
The cheap car, a pet project of Cornell-trained architect Ratan Tata that he helped design, is aimed at getting India's masses off their motorbikes and into cars.
"I hope to make a contribution to making life safer for them (the masses)," said reclusive tycoon Ratan Tata, who has spearheaded the growth strategy of the company known for its philanthropic values and paternal management style.
But despite its low price and safety factors, analysts say the four-door, five-seater could be a tough sell for Tata's vehicle arm, Tata Motors, even with an economy growing by a scorching nine per cent, creating new affluence.
If motorbike owners wanted to graduate to cars, there are a lot of good second-hand cars for 100,000 rupees or less, analysts say.
"It will not be an immediately profitable venture, it will take a longer time to break even-at least three years," said Angel Broking analyst Vaishali Jajoo.
Tata has said it's targeting the car at Indian and eventually other emerging markets. A Tata Motors board member recently revealed the car would get a significant 25 kilometres (15.5 miles) per litre.
"Acceleration wise, it's the same as a Maruti 800," board member R.A. Mashelkar said, referring to the most popular budget model made by Japanese- owned rival Maruti Suzuki that sells for 4,800 dollars.
"The projected expenditure of Tata Motors and suppliers on the project is 25 to 30 billion rupees. Half of that amount is what Tata Motors would spend."
Tata Motors is taking on the challenge at a time when its share price has slid some 20 per cent this year due to a decline in its vehicle sales.
If the cheap car is a winner, environmentalists fear it will further congest India's clogged roads and add to choking pollution.
But Tata says the car will create no more pollution than a motorbike and is confident of its success.