Tata Motors To Put India On Global Auto Map
Tata Motors intend to put India, its home market, on the global automotive map. How? By unveiling a car priced at $2,500, less than half the cheapest car on the market.
Dubbed the 'People's Car', the Indian automaker's pride is engineered to rival other compacts in the global auto realm. The new model, using re-engineered plastics and modern adhesives, is a far cry from the premium Jaguar and Land Rover brands which Tata is negotiating to acquire from Ford. The automaker is poised to develop a cheap but efficient small car which will be inspired by close observation of a local market where millions often ferry families of four, plus baggage, on motorbikes and scooters.
"The product has rightfully gained a lot of international attention," said Mohit Arora, the managing director for India at research firm J.D. Power Asia-Pacific, who will fly in from Singapore to see the car being unveiled by Chairman Ratan Tata. "It's a big, big deal for Tata Motors, and will be recorded in history books, whether or not it does well."
Other automakers such as Fiat, Honda, Toyota, and VW have since said that they will be producing low-cost cars. And the Nissan and Renault alliance, which is doing well with its Logan sedan, is in the process of building a $3,000 car with Bajaj Auto Ltd.
"Scepticism has given way to imitation," said Ashutosh Goel, an auto analyst at Edelweiss Securities. "Every global car maker has realised the need to be in the emerging markets with a model like this for mass volumes, if not at 100,000 rupees, then perhaps at 150,000 rupees," he added.
The 'People's Car' arrived at the market just in time. Oil prices then near $100 a barrel hence the necessity to shift to fuel-efficient "green" cars. In India, the mini Maruti 800, made by an Indian government and Suzuki venture, played an identical role in the 1980s. The car served as a viable modern option for shoppers. At present, helped by rising middle-class incomes, small cars, led by models such as Maruti's Alto and the Hyundai Santro, make up more than two-thirds of a domestic car market that should nearly double to 2 million units a year by 2010, the report said.
"Small cars have always been popular in India, even when oil prices were low," said Ashvin Chotai, an Asian auto analyst based in London. "Globally, higher oil prices are accelerating a shift towards compact and small cars, and regulatory developments such as C02 standards in Europe, and congestion and parking constraints are reinforcing it," he said, adding this was not a short-lived fad.
"The quality of the initial launch must meet minimum expectations of the global industry, otherwise the whole project could be discredited," Chotai concluded. “If Tata can't develop and produce a car at a price of less than $3,000, it's very unlikely any global company will be able to do it. And if the vehicle concept can't work in India, it's extremely unlikely to work in any other part of the world."
[credit: Guardian Unlimited]
Dubbed the 'People's Car', the Indian automaker's pride is engineered to rival other compacts in the global auto realm. The new model, using re-engineered plastics and modern adhesives, is a far cry from the premium Jaguar and Land Rover brands which Tata is negotiating to acquire from Ford. The automaker is poised to develop a cheap but efficient small car which will be inspired by close observation of a local market where millions often ferry families of four, plus baggage, on motorbikes and scooters.
"The product has rightfully gained a lot of international attention," said Mohit Arora, the managing director for India at research firm J.D. Power Asia-Pacific, who will fly in from Singapore to see the car being unveiled by Chairman Ratan Tata. "It's a big, big deal for Tata Motors, and will be recorded in history books, whether or not it does well."
Other automakers such as Fiat, Honda, Toyota, and VW have since said that they will be producing low-cost cars. And the Nissan and Renault alliance, which is doing well with its Logan sedan, is in the process of building a $3,000 car with Bajaj Auto Ltd.
"Scepticism has given way to imitation," said Ashutosh Goel, an auto analyst at Edelweiss Securities. "Every global car maker has realised the need to be in the emerging markets with a model like this for mass volumes, if not at 100,000 rupees, then perhaps at 150,000 rupees," he added.
The 'People's Car' arrived at the market just in time. Oil prices then near $100 a barrel hence the necessity to shift to fuel-efficient "green" cars. In India, the mini Maruti 800, made by an Indian government and Suzuki venture, played an identical role in the 1980s. The car served as a viable modern option for shoppers. At present, helped by rising middle-class incomes, small cars, led by models such as Maruti's Alto and the Hyundai Santro, make up more than two-thirds of a domestic car market that should nearly double to 2 million units a year by 2010, the report said.
"Small cars have always been popular in India, even when oil prices were low," said Ashvin Chotai, an Asian auto analyst based in London. "Globally, higher oil prices are accelerating a shift towards compact and small cars, and regulatory developments such as C02 standards in Europe, and congestion and parking constraints are reinforcing it," he said, adding this was not a short-lived fad.
"The quality of the initial launch must meet minimum expectations of the global industry, otherwise the whole project could be discredited," Chotai concluded. “If Tata can't develop and produce a car at a price of less than $3,000, it's very unlikely any global company will be able to do it. And if the vehicle concept can't work in India, it's extremely unlikely to work in any other part of the world."
[credit: Guardian Unlimited]
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