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Last Updated: Thursday, 10 January 2008, 15:30 GMT
India's car for the common man
Karishma Vaswani
By Karishma Vaswani
India business correspondent, BBC News

Necessity is the mother of invention - and for 35-year-old Vijay Pawar that means turning his two-seater motorbike into a ride for the whole family.

Vijay Pawar and family
Mr Pawar is worried about the risk of wobbling in traffic with his family

Manoeuvring his machine around the mean streets of Mumbai is no easy task - the city's relentless traffic makes the daily school run a dangerous journey for his two kids Roshan and Sakshi.

But he does not have much of a choice - he cannot afford much else.

"Let's face it - I don't make that much money. I can afford this motorbike, but I am worried about the safety of my family," he says

"All four of us have to get on this motorbike and this is how we drop our kids off to school - it's just not right."

But this week at the Delhi car show - the answer to his prayers.

A revolution in the small car market - the Tata Group's People's Car. A tiny, jelly bean-shaped automobile, retailing at around $2,500.

Tata's promise

This an ultra cheap, ultra small car, created for the common man in India - and it is an attempt to give millions of Indians the chance to participate in the benefits of India's strong economic growth.

It was a promise the chairman of the Tata Group, Ratan Tata, said he had made to the Indian public - and to the world - and one he was not going to break.

Don't expect them to make any money from this car for another two or three years
Darius Lam,
Autocar Professional

"Since we made the decision to build the one lakh (100,000 rupees) car the price of lots of raw materials like steel, has gone up," he tells a jam-packed room of journalists, onlookers and Tata fans in Delhi.

"But the dealer price of this car - the Nano - will be 100,000 rupees. Because a promise is a promise - and we know how to keep ours."

Keeping that promise meant making a car that has the bare minimum in add ons or perks. You won't find any air conditioning in Tata's Nano, or power steering or power windows.

Instead, what you will get is a four-door, five-seater car with an engine of 625 cubic centimetres.

To keep costs low, the company has said that if you want any of the extra add ons you're more than welcome to buy the deluxe versions - but the basic model will sell at the original price of one hundred thousand rupees. That is half the cost of the world's cheapest car on the market.


But many are now wondering that if you shave off all the bits of a car and sell it at such a low cost - how are you supposed to make any money from it?

Analysts say it will be challenging - initially.

Traffic in the Indian town of Gurgaon
India is fast becoming a major market for the world's carmakers

"It will be very difficult for them," Darius Lam of Autocar Professional tells me at the Auto Show.

"They will have to ramp up production of their Nanos, and they will have to sell lots of these before they make any money from it," he says.

"But it's a good thing for their reputation, their image - and it's likely that's one of the reasons they've done this.

"But don't expect them to make any money from this car for another two or three years."

But for millions of Indians that is an insignificant consideration.

This car will give India's masses a chance to be part of the great Indian dream and an opportunity to finally participate in the benefits of economic growth.

Indian streets may never be the same again.

Annotated image of Tata car

The Tata Nano is revealed

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