Today Tata Motors rolled out their new Nano motor car – the People’s Car. The launch of the People’s Car by Tata Motors is a defining moment in the history of India’s automotive industry.
For the Tata Group, it is the realisation of a pioneering vision to create a breakthrough product globally that rewrites the rules of the small-car business.
The vehicle will sell for 100,000 rupees or $2,500 (£1,277) and enable those in developing countries to move to four wheels. The four-door five-seater car, which goes on sale later this year, has a 33bhp, 624cc, engine at the rear. It has no air conditioning, no electric windows and no power steering, but two deluxe models will be on offer.
Tata will initially make about 250,000 Nanos and expects eventual annual demand of one million cars. The price will be slightly more than the 100,000 once tax and other costs are taken into consideration.
Tata’s small car will get cheap car insurance cover, but funding might turn out to be expensive. According to lenders, interest rates depend on the borrower’s profile, and aspiring buyers of Nano are likely to be those moving up from two-wheelers and hobby customers.
The good news is that insurance for the small car could be available for as low as Rs 2,000 and could fall further if Tata assures insurers of the availability of low-cost spares.
The Nano release comes as India’s domestic car market is predicted to soar in the coming years on the back of the country’s fast-growing economy and increased consumer wealth. Indian car sales are predicted to more than quadruple to $145bn by 2016.