It's just two days before the debut of Tata's $2,500 car and a major U.S. car maker blinked. Ford said Tuesday it will invest $500m in a vehicle plant in India. Ford also says a significant part of that investment will go toward making a small, inexpensive car. Ford is not alone in trying to grab headlines away from Tata.
Bajaj Autos, Indian's first and the world's fourth largest maker of three wheeled vehicles, has decided to add a wheel and is getting into the car market. "It would be inappropriate to say that it will be priced at a lakh or two or anywhere in between because is too premature," says Bajaj. The car, which is two to four years away, "will set a new benchmark in terms of fuel economy and offer twice as much as the current crop of small cars," according to Bajaj. Will increasing fuel efficiency come at the expense of more important things?

The New York Times wrote an article about Tata's $2,500 car with a compilation of the cost-cutting measures. The Times article questions the environmental claims from the company that the car would have low emissions (more precisely, that a car this cheap could maintain low emissions for the life of the vehicle). Go below the fold for the quote from the Times.

Related:
[Source: New York Times, Business Week, IBN Live, Hindu Business Line]

Michael Walsh, a pollution consultant and former United States Environmental Protection Agency regulator, said that a car so cheap was likely to lack the complex technology to maintain its initial level of emissions and that without such technology cars could soon be producing four to five times their initial pollution level.

Ratan Tata, chairman of the Tata Group says "the emissions standards were much easier to meet than the crash test." What do you think readers: Is the Rs 1-lakh giving up safety and low emissions for high fuel efficiency?



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