MUMBAI: The world’s cheapest car, the Tata Nano, will be launched next week with backers hoping its troubled birth and the global economic crisis will not put off buyers from India’s emerging middle-classes.
The sporty, jellybean-shaped car has attracted world headlines thanks to its price tag of just 100,000 rupees ($2,000) for the basic model, which is cheaper than some laptop computers. But although marketed as the affordable car for millions of Indians, analysts said the Nano and its manufacturer Tata Motors could be in for a bumpy ride because of production problems, a dip in demand and global economic woes. Only 30,000 to 50,000 Nanos are likely to be sold in the first year because of limited production capacity, auto sector experts said. “Nano’s sales will be production-led, and not demand-led,” Mahantesh Sabarad, an analyst with Centrum Broking in Mumbai, said ahead of its unveiling on Monday and its appearance in car showrooms in April.
The Nano is being rolled out from two manufacturing plants in what Tata group chief Ratan Tata has described as a “makeshift kind of operation.” “This is a hurried launch. The main manufacturing plant in Gujarat is not even ready,” Sabarad told AFP. In October last year, Tata Motors pulled the Nano car project out of West Bengal state in east India, even though the plant near the state capital Kolkota was 90 percent completed. The retreat followed a month of violent demonstrations by activists and farmers evicted from their land that raised wider fears about India’s attractiveness for foreign investors. Tata Motors’ new plant in Gujarat state, western India, is not expected to be ready until the end of 2009.Read More »World’s cheapest car due next week