The new product is a car priced to compete with motorcycles. By far the world's cheapest car, Tata Motor's new "Nano" is expected to sell for only $2,200.
Possible Impacts of the Nano Car:
- Rreferring to the low-cost car, Chief United Nations climate scientist Rajendra Pachauri, who shared last year's Nobel Peace Prize said, "I am having nightmares."*
- More congested roads: Imran of Hyderabad told the Times of India: "I would like to leave India the very day this car comes on road. I cannot imagine commuting for 4-5 hours between my home and office (because of the congestion)."
- Pressure to invest more in highways and road infrastructure. Such projects would likely come at the expense of upgrades in rail transport systems.
- Sales of two-wheelers is expected to decline. (On the other hand, sales of motorbikes may increase if motorbike prices drop in response to competition from the automakers. Either way, the added competition probably spells lower profits for two-wheel vehicle manufacturers).
- Increased steel prices and fuel prices.
- The Nano may spell the end of the auto-rickshaw or tuk-tuk.
- This cheap car designed for India is also intended for export and Thailand tops this list: "Another component maker Rico Auto has entered into a long-term supply agreement with Tata Motors. It expects to make Rs 2,200 on each Nano car sale from its ancillary supplies. Rico Auto may also take its tie-up forward to Bangkok where Tata might expand soon."
- The Japanese government -- which funds the construction of roads and bridges in places like Cambodia -- may wake up to discover that Indian auto-makers have become the major beneficiaries of its foreign aid.
- Indian peasants, a number of whom were relocated to make room for the Tata plant, are protesting the new car, claiming Tata Motors promised them good jobs which have not materialized.
- What Nano is to automobiles, "One Child Per Laptop" (OLPC) is to personal computers: a low-priced alternative designed specifically for consumers in the developing world. (I have blogged about the OLPC/XO Laptop program).
- The four-door subcompact Nano has a two-cylinder 0.6 litre gasoline engine with 33 horsepower, giving it a top speed of about 100 km/h (60 mph), according to Tata. It gets 21.2 km per litre (50 miles per gallon). More Nano car specifications here.
*Any new global warming treaty that fails to mandate emission limits for India and China looks increasingly pointless
Nano car specifications: Tata Motors website, Reuters, Times of India (mentions rival low-cost vehicles)
Other perspectives: Blogging from Bangalore, Bhanu provides both an original perspective and critical analysis of the Nano car (see also Bhanu's remarks in Comments, below). The Washington Post also has worthwhile coverage of Nano: see this story for more background, this commentary by Mira Kamdar for an elaboration of environmental concerns (and hopes), and this chart which shows how the Nano car stacks up against the Model T Ford.