The Tata Motors Nano, the world's cheapest car at around €1,500, will hit Indian roads in July with demand set to far outstrip supply. Hundreds of thousands are expected to put their name down for a Nano following its formal launch today, and the first 100,000 owners will be picked at random.
"We are at the gates offering a new form of transportation to the people of India, and later I hope other markets as well," Chairman Ratan Tata told reporters.
Launching six months behind schedule and with production in the first year severely constrained, it will take over a year to deliver the first 100,000 Nanos to an otherwise subdued market.
"From the drawing board to its commercial launch, the car has overcome several challenges. I hope it will provide safe, affordable four-wheel transportation to families who till now have not been able to own a car," Mr Tata said.
Since the Nano was first shown, its main production plant had to be moved following land protests, the company posted its first loss in seven years, its shares have dropped 70 percent and its credit rating been downgraded with the threat of further downgrades remaining.
The basic version, excluding taxes, will still be 100,000 rupees. But once taxes and dealers charges are included, the Nano will be in showrooms for 112,735 indian rupees in some parts of India, while top-end models with air conditionng and other extras will cost close to 200,000 rupees.
A European variant will be launched by 2011, and the company is also looking at the United States as the economic situation has made low-cost cars even more attractive, Tata said.
Analysts said Tata may raise prices soon, but slim margins, initial capacity constraints and muted market sentiment mean that breakeven on the project will take five to six years.
Competition is not far off: Volkswagen, Toyota, Honda and Fiat are eyeing the segment, and the venture of Renault/Nissan with Bajaj is on track to launch a $2,500 car in 2011.
Reuters