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$2,500 Car May Soon Bring Mobility To Developing World

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By GAVIN RABINOWITZ, The Associated Press

Published: January 11, 2008

NEW DELHI - For millions of people in the developing world, Tata Motors' new $2,500 four-door subcompact - the world's cheapest car - may yield a transportation revolution with as great an impact as Henry Ford's Model T, which rolled off an assembly line a century ago.

The potential impact of Tata's Nano has given environmentalists nightmares, with visions of the tiny cars clogging India's already-choked roads and collectively spewing millions of tons of carbon dioxide into the air.

Industry analysts, however, say the car may soon deliver to India and the rest of the developing world unprecedented mobility.

"It is a potentially gigantic development if it delivers what has been promised," said John Casesa, managing partner for the Casesa Shapiro Group, a New York-based auto industry financial advisory firm.

"I think there is immense unmet demand for a vehicle of this type because it effectively eliminates the great leap currently required to go from a two-wheel to a four-wheel vehicle," Casesa said. "They are creating something that has never existed before, the utility of a car with the affordability of a motorcycle."

The basic model, expected to roll off assembly lines later this year, will sell for 100,000 rupees, or about $2,500.

Company chairman Ratan Tata, who introduced the car at India's main auto show, has long promised a $2,500 "People's Car" for India - a country of some 1.1 billion where only seven of every 1,000 people own a car.

"A promise is a promise," Tata told the crowd after driving onstage in a white, luxury edition Nano.

The company will not say how the price was kept so low on the basic version and won't say how much the luxury Nano will cost.

But the basic version is austere: There's no radio, passenger-side mirror, central locking or power steering, and only one windshield wiper. Air conditioning is available only in deluxe models.

The Nano has a two-cylinder, 0.6-liter gasoline engine with 33 horsepower, giving it a top speed of about 60 mph, according to Tata. It gets 50 miles per gallon.

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