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World's Cheapest Car Goes On Sale In India

Our car warranty customers may be interested to know that the long-awaited Tata Nano has gone on sale in India during April 2009. It is a new 4-seater city car costing the equivalent of around £1300, which includes a manufacturers 18-month or 24,000 miles warranty for parts, wear & tear. Bargain? Possibly yes; and the reason may just be that this would make for an excellent second car or run about!

The CEO of Tata, Ratan Tata has praised his engineers by making such an incredibly affordable car possible. He has hoped that the price will open the motoring market to the middle classes of India, overtaking the scooters, auto rickshaws & tuk-tuks. Up to now its website has had 30 million hits.

Just like many small cars before it, the Nano has been designed & styled with uniqueness in mind. The basic trim level (there are only 3 levels) Nano Standard which is available in three colours and has a fold-down rear seat. The middle range CX edition which comes with more colour options and an air con, while the top range LX includes central locking, electric windows, fog lamps, mobile phone charger socket, radio etc. There is also talk of further Nano accessories, merchandise, body kits & decals. Sound a bit like a SMART to you?

Bearing in mind that this is "the cheapest car in the world" one should not be expecting too much. The Nano is powered by a two-cylinder 623cc petrol engine, has rear wheel drive and a 4-speed gearbox; giving 32bhp and a top speed of around 66mph! Twelve-inch wheels are standard. To put that in perspective, its tiny! The very small boot could store a large hold all. There is only one side mirror & windscreen wiper.

The Nano is made of sheet metal with crumble zones. It is just 3.1 meters long, 1.5 meters wide & 1.6-metres tall, weighing 500 lbs/600kgs. Inside, It's built for 4, but again that may depend on the size of the four people to a very large degree. Perhaps 2 children in the rear at best. A diesel is also in development stages too, but it will not be available for some time.

Due to it only being the weight that it is, it doesn't need power steering either. Thanks to the Nano being so small, having a tight turning radius and the fact that the four wheels are situated at the four corners of the body, maneuvering is really easy. The car changes direction in an instant but not so easily at speed, in fact they can become slightly over zealous-making it something to watch for. Its overall stability at high speed may not be comfortable for some, but it is highly unlikely that those sorts of speeds will be down at length. It has hard suspension, with decent springs & damping, but it will have to cope with Indian roads but this may shorten the vehicles life span eventually, hence the short warranty offered.

There have been concerns voiced about the Nano's environmental impact & safety standards, but Tata says that it has been built to meet safety & emissions requirements, to be fuel efficient & be low on emissions. It currently meets all emission & safety regulations in India. If and when the Nano is launched overseas it will meet European standards. The car has the provisions to be fitted with airbags & ABS but it is not compulsory in India at this time.

Apparently a team of 500 engineers worked on the car, in an effort to level fears that something so cheap could not be safe. Mr. Tata has stated that the Nano had passed a full-frontal crash test in India & was designed to sustain further impact testing under European standards. Tata cut its manufacturing costs by minimizing components - particularly steel - and has taken full advantage of India's low production costs. If such a car were to become available in the UK, it would not be unwise to ensure that you had an extended car warranty!

In regard to its green credentials, it manages 50 mpg, but it is the volume of cars that are expected to be used which is the scary element. Currently in Delhi, where air pollution levels are more than twice the safe limit, they are registering 1,000 new vehicles a day. Needless to say that with the Nano, there will be considerably more. However, in an ironic twist, that will mean the average speed at peak times will fall to around 7mph, easing concerns about safety at speed & accidents. However CEO Tata urges that "We need to think of our masses. Should they be denied the right to an individual form of transport? I hope this changes the way people travel in rural India. We are a country of a billion and most are denied connectivity. This is a car that is affordable and provides all-weather transport for the family."

The Nano is also known as the 'lakh' car, from the colloquial Indian word for 1,000,000 rupees - its price. Customers who want to buy the Nano must pay 300 rupees for an application form, then pay the entire cost of the car or get financing from one of 18 banks Tata Motors made special arrangements with.

At present, Tata are taking orders until April 25 and then are randomly selecting 100,000 people who will get the first shipment of vehicles. Everyone else will then have to wait. Tata will pay interest on booking deposits: 8.5% for people who have to wait one to two years to get their Nano and 8.75% for those who hold out longer. These anticipated delays in meeting demand are attributed to alleged protests hampering construction, and flooding. Tata's Singur plant in West Bengal is still under construction and will eventually have an annual capacity of 250,000-350,000 cars. It is scheduled to be completed "soon".

Tata will initially make about 250,000 Nanos & they expect to have an annual demand of one million cars. The price will be slightly more than the "lakh" once tax and other costs are taken into consideration. Its release comes as India's domestic car market is predicted to sharply rise in the coming years, due to their fast-growing economy & increased consumer wealth. Indian car sales are predicted to more than quadruple to $145bn by 2016.

As we all know, Tata took over Jaguar Land Rover last year. Despite the festivities surrounding the release of the Nano, sales won't make a dent in the debt-strapped company. Tata Motors is still experiencing overall falling sales and is in talks with banks to re-finance a $2 billion loan it took out to buy Land Rover and Jaguar & help restructure that debt. If Tata sells 250,000 Nanos a year, it will only add 3 percent to the company's total revenues.

Current plans suggest the Nano will be sold in India for two or three years. Then possibly to Africa, Latin America & S.E Asia. Discussions are underway for a possible global distribution tie-up with Fiat, which could even see the Nano arrive in Europe!

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The opinions expressed are those of the author and are not necessarily held by the Click4Group unless specifically stated. The material is for general information only. Always obtain independent, professional advice for your own particular situation.