India's Tata Motors cheap car could be good/bad for country
We told you last year about India's Tata Motors' plan to begin selling a four-door, rear-engined, VW Rabbit-sized vehicle for less than 100,000 Rupees, or about $2,400.Right now, .8% of Indians can afford to own cars compared to 70% of Americans. Even so, India's urban roads are already over-crowded, and urban planners as well as environmentalists worry that even a small increase in car ownership could be disastrous for the country.
Or it could be just the thing needed to spur the country's economy. Optimists see the as-yet-unnamed super-cheap Tata spurring the construction of larger, more modern highways, as well as fueling stations, driving schools and car parts stores.
Either way, Tata will need to sell a whole helluva lot of 'em since they will carry less than a 3% profit margin.
(A Tata Indigo Marina is pictured)
[Source: Sunday Herald]
Reader Comments (Page 1 of 1)
webnportal 6:55AM (7/12/2008)
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Barney 6:16PM (8/20/2007)
I can't see how a cheap plastic car could be good for the economy and especialy if the car maker could lose it all. Better highways, gas stations etc. still have to be paid by the many and more then just those who could afford a new car. Tata only makes cars and those mentioned "improvements" are paid for by somebody else.
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SPG 6:33PM (8/20/2007)
I'd love to have a huge stack of investment money.
I'd grab a bunch of these "Tatas", a few Ladas, a few Protons, and a couple of the better ultra cheap cars from China. Rebadge them, and then sell them for cheap. Within five years I could sell the brand to a company like Ford who does not have an economy car range in North America (Focus is probably high class compared to a Tata) and start a low priced economy car revival. It might go Yugo or it might go Subaru.
Anyone got a few million to take a chance on someone who has little idea what they are talking about?
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Viv 6:25PM (8/20/2007)
As an Indian i could tell you i don't care if the Tata's decide to build Bugatti's starting tomorrow nothing about the infrastructure will change until they are is a change in the goverment from these old geezers to the more educated of today. Half the politicians in the country couldn't pass the 10th grade if their life depended on it.
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rgseidl 6:26PM (8/20/2007)
Driving in India is indeed scary, mostly because of the fact that drivers routinely ignore any and all traffic laws. If it's your day to be re-incarnated, so be it. On top of that, you have an underdeveloped, pothole-ridden road network used by untold numbers of slow-moving, overloaded buses, oxcarts, livestock, bicycles, pedestrians etc.
Also, cows are considered sacred in India and all traffic must stop to let them cross the road. That's why until at least very recently there were some highways but zero freeways in India.
That Tata will not need a powerful engine. Rather, it will need excellent suspension and high ground clearance.
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SSBR 6:57PM (8/20/2007)
The next time when you complain about tech support, just remember we are way better off and should be mindful these folks live in farless humbling environments as us. Ok, i'm going to go to the corner store in my HUMMER, brb
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Za 7:27PM (8/20/2007)
Hehe...Tata.
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Dausman 8:08PM (8/20/2007)
Don't know if 57,600,000 million $$ is a substantial profit margin....someone ck my math, I've had a beer.. if the profit margin is 3% or less ...3%x $2400=$72 and .8% of the population that can afford a car at $ 2400 and the population of India is 1 billion plus and the entire population that can afford a TaTa bought a Ta Ta then
1 billionx.8% = 800,000....800,000(using a round # of a billion as the population) then the profit per auto would be $72 x 800,000= $57,600,000...is that right? I'm sure I did not include some important factor...
I know it is not feasible...hell, can they produce 800,000vehicles?? maybe in 10 years??
Do they have they highway system to accomodate that many more vehicles than thay already have????
Do thay have the fuel???
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besian 2:43AM (8/22/2007)
1 bilion x 8% = 80.000.000
ZK 12:54AM (8/21/2007)
Whats the difference between a highway and a freeway? Last time I was in India, I saw a few brand new highways/freeways. All cars, trucks and some bikes. No cows.
One was to and from the Bombay airport and one was from Bombay to Pune.
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rgseidl 11:15AM (8/21/2007)
@ ZK -
India is changing rapidly and the Bomby-Pune Expressway is one example of that. I was referring to the situation ca. 2000 when I last visited New Delhi and Mumbai.
Btw, a highway is what you would call an A-road in the US or Europe. It's a major overland route but usually doesn't have a central divider. There are level crossings every once in a while and the law does not prohibit use of the road by slow-moving classes of vehicles - though it may be quite dangerous for them to do so. Overtaking a vehicle may require an excursion into the opposite lane.
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Ashish 11:29AM (8/21/2007)
It is indeed a nice business plan if you look at it and very ambitious. Courageous to execute. If you look carefully, there have been failures and successes in the past. There have been at least two previous attempts to produce cheap plastic cars by smaller companies which have faded as soon as they hit the road. I have no links but auto-journos from India should back me up. The TATA brand carries alot of weight in the market it is targeting, namely the rural population. But then again, the people are smarter than to buy a plastic car that gets bashed in. this will only make the old bread-box Maruti 800/ Alto look more attractive.
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Don 8:15PM (8/21/2007)
Sorry, but this is what happens when you have 1 BILLION people running around.
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prashanth 11:26AM (8/23/2007)
From when did car makers become responsible for building infrastructure? Some have suggested that the Tata car will bring chaos and that Tata should do somethign about the roads...I have a question: Does America/Europe ask GM/Ford/Toyota et all, to build roads the moment they announce a new car? Just because Tata is planning to build somethign cheap doesnt mean it'll be bad. Only if you have been in India, do you realise the value that name carries.
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amit 12:44PM (1/09/2008)
When TATA is making a good price band for indian people than what is the problem to others, Actually the other company's want to earn more money from the people so they r critizing this car. People of india r getting the right price car, In foreign the cars r in budget of every individual than why not in india. still in india the multinational companys r making indian people seperate. They r making standard of leaving much higher.
so TATA is doing the right job and every company should come to that price band.
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