Word: carred
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When Tata first suggested an ultra-cheap car a few years ago, other manufacturers scoffed, saying the project was a pipe dream. But if Tata lures away even 10% of the 6.5 million Indians who buy motorbikes every year, not only will it have a hit on its hands, it also will have expanded India's car market by more than half. Competitors aren't willing to cede that kind of market share without a fight. Carlos Ghosn, head of Renault-Nissan, recently announced that his company was looking at building a $3,000 car in India. Fiat, General Motors...
Carmakers aren't just targeting India. Tata Motors has plans to export its econobox to Southeast Asia and Africa. Ratan Tata, chairman of Tata Motors' parent company, Tata Group, believes his company can eventually sell as many as 1 million cheap cars a year worldwide. That may be a realistic assessment. Globally, up to 3.7 million such vehicles could be sold annually within the next few years, mostly in fast-growing markets like Brazil, China, India and Russia, says Abdul Majeed, a partner at PricewaterhouseCoopers in Chennai (formerly Madras). "It's all about affordability and fuel efficiency," says Majeed...
...Logan in 2004, it expected to sell the bulk of the basic sedans in Eastern Europe. But the Logan, which Renault builds in Romania and Russia and costs as little as $7,200--about 40% less than rival sedans--quickly took off in wealthier Western Europe as well. The car now sells in more than 50 countries, and Renault is struggling to meet demand. "Our aim is to produce the most affordable car in its segment, and because we're doing that well, we're starting to see more affluent buyers and families buying Logans as their second and third...
Building ultra-cheap cars is possible in large part because of low manufacturing costs in developing countries. Tata and other Indian automakers estimate that their engineering costs alone are about half what they would be in Europe or the U.S. At the same time, Tata has tapped the skills of Italy's Fiat, with which it has a joint venture in India, and of engine designers from Britain's West Midlands region, some of whom had been jobless after closures in Britain's auto industry over the past few years. Indian producers are relentless cost cutters. Many, including Tata...
...company has yet to release a name for the car. "We should remove this perception of something that's going to be a dinky car," says Ravi Kant, managing director of Tata Motors. "It's a regular, wholesome car that will be a joy to drive, and of course it will have very good fuel efficiency." Will that be enough to convince India's aspiring classes? Tata expects at the outset to sell 20,000 of these cars a month in India, in part because consumers will see them as safer than motorbikes on the country's chaotic roads...