Ratan Tata, chairman of India''''s second-largest and longest-established conglomerate, said he is pressing ahead with a project to bring to market a $2,000 car (Rs 1 lakh), which he believes could revolutionise personal transport in India and some other Asian countries. He conceived the idea several years ago: to use components from the region''''s large scooter and motorcycle industries to create a basic four-seater, four-door car to which the region''''s millions of scooter and motorcycle riders, plus 3-wheeler users could aspire.
"It is my dream to make the car a reality within the five years I remain as Tata chairman," said Tata. The project has become more ambitious as it has entered trial engineering phases — most notably with the cutting of the target retail price by one-third from the originally envisaged $3,000. Total material costs for the vehicle are claimed to have already been pared down towards the $ 1,200 mark.
The vehicle might not be acceptable to Western consumers but "it would not need to be a poor substitute for a car," he said. "It will look like a car and have proper seating-stretched canvas seats would not, for example, be acceptable. It would be all right for it to be a bit more noisy than an ordinary car, but it has to be both simple and safe."
Despite the projected price being less than half that of the cheapest car on the Indian market, a basic Suzuki model, Tata said it was not unrealistic and would not need to be subsidised. The vehicles would be produced primarily in kit form for assembly at several places around India, to create local employment. They have a potential market in other Asian countries such as Vietnam, Malaysia and Indonesia, said Tata, in addition to bridging the gap for 2 million to 3 million Indians between powered
two-wheelers and cars.
After the successful launch of no frills'''' hotel, the Tatas have said their peoples'''' car would hit the road in three years despite scepticism among the arch rivals of Tata Motors on the feasibility of the Rs one lakh car. "The Rs one lakh car is being developed by us. It will hit the road in three years," Tata group chairman Ratan Tata told PTI. The proposed peoples'''' car would not be a stripped down version of any existing car, rather it would be a ground-breaking experience for Tata Motors, he said.
Contesting the claim of the Tatas to develop the Rs one lakh car, Maruti Udyog, which makes the cheapest car ''''M-800'''', said it would be impossible to make the car at such a price point while India''''s second-biggest carmaker Hyundai said the vehicle would not be able to meet safety and emission norms. Brushing aside the speculation on the feasibility of the car, Tata said its upcoming car would not be a no-frills car, rather it would be a car which could accommodate 4-5 people and adhere to all the requisite safety and emission norms.
Earlier, a senior Tata Motors official had remarked "all the best to Maruti," when asked about Maruti''''s assertion that it would meet the challenge of Tata Motors to develop the Rs one lakh car. A top Maruti official doubted the idea of an entry-level car with Rs one lakh price saying it did not look feasible.