Tata Motors Announced Nano, a $3,000 People's Car:
In January, 2008, India’s Tata Motor Corp. announced the launch of the Nano, priced to sell at less than $3,000. This price is less than half that of the least expensive car on the market today, the Romanian built Renault Logan. Tata has already built ACE, a rudimentary car that costs $2,100. Although it doesn’t meet safety standards, sales have increased eight times since its initial launch. (Source: IHT, India offers cheapest car on earth, 1/7/08)
Is this the Wave of the Future?:
The market for such a low-priced car is huge...90% of
China and India’s adult population do not own a car. Even in the U.S., sales of cars priced under $10,000 could grow by 65% by 2012, according to industry consultant Roland Berger. (See Forbes, “Tata in Tacoma?” April 2007)
What the Tata Motor Corp’s $3,000 Car Means to U.S. Automakers:
Many experts are skeptical that Tata, which has only been making cars for the last 10 years, can manufacture a $3,000 car that meets emission and safety standards. However, even if the car falls short, it will open the door wider for other auto makers to produce cars that are small and affordable. For example,, Pakistan’s Transmission Motor company built basic four-wheelers for $2,100 and started exporting them to Sudan, Qatar and Chile.
India could become the next big hub for auto manufacturing. Although the country only produced 1.1 million cars in 2007, it was projected to triple to 3 million by 2010.
Although India’s car sales were less than 1 million, China’s 2007 total cars sales were estimated at 8 million. In 2006, China overtook
Japan as the world’s second largest car market, selling 7.2 million units, an increase of 25%. China’s government forecasted that
demand for cars would top 20 million by 2020. (See People’s Daily, "China's home-made car sales surge 22 pct in first quarter," April 9, 2007)
Japan’s auto sales were up 6.3% in 2006 to 11.5 million units. Demand in North America (up 34%) and
Europe (up 10.8%) for smaller cars drove the increase in Japan's auto production, which propelled Toyota to beat GM in world auto sales. For the first time since 1987, over 50% of Japan's auto production was for exports.
Over 75% of the world's cars are manufactured in North America, Europe and Japan, but China overtook South Korea and France to become the fourth largest auto production area in the world. The capacity of China’s car industry was 10 million by 2008 and was expected to double to 20 million by 2010. In 2007, Chery became the first Chinese car company to top domestic monthly sales.
Other Ways to Reduce Dependency on Foreign Oil:
Ultra-small cars may become an attractive way to reduce dependency on foreign oil. Rural and suburban drivers may find these cars too uncomfortable for long-distance driving, but ultra-small cars may be just right for city driving. As the U.S. recession makes many drivers look for ways to economize, ultra-small cars may be seen as an attractive alternative.
The food riots in 2008 demonstrated to the U.S. that corn-based ethanol is not a good way to reduce global warming. In most of the developing world, any foodstuff that could be grown for fuel will be needed to feed the drivers.
If you want to support efforts to reduce global warming, the way you drive and the way you look after your car are almost as important for mileage as the choice of car itself. Keep the tires pumped up; change the air filter regularly; don't accelerate too quickly after a stop; and take sports gear and other heavy junk out of the trunk. (For more great tips, see The Economist, “Mean Machine”, April 9, 2007)
(Source: Der Spiegel, “We Indians Have to Struggle to Catch Up,” April 9, 2007; People’s Online Daily: “Insiders Say Measures Won’t Hit Top Carmakers,” January 17, 2007; “Booming auto sales in emerging markets lure world’s carmakers,” March 15, 2006; Delaware online, “India could be next hub for car making,” ; The Economist, “A different route,” December 13, 2006)
