Tata Nano - Is the world's cheapest car a blessing or a curse?

by Xin Lu on 23 March 2009 30 comments
Photo: Tata Nano

Today Tata Motors announced that the Tata Nano  will be released in India in July, 2009.  With a price tag of around $2,000, the Tata Nano is the cheapest car in the entire world.  Will this innovation change the world for the better or the worse? 

So far the demand for the Nano seems to be quite high since many Indian families desire a four wheeled car and the Nano's cheapest competition is about twice as expensive.   The initial production of 100,000 vehicles will be sold by random drawing.  Many Indians have already purchased an application to purchase the car, and Tata Motors is holding their deposits for the new vehicles.  Those who do not receive a car in the first round will have to wait until more can be  manufactured.

Although the Nano is being nicknamed as "The People's Car" for its affordability, there are opponents to how affordable this car is.  Since the car is so cheap that so many Indians will be able to buy one, some fear that its launch will increase the congestion in the streets and also add to the already dense pollution in India.   However, Tata argues that the Nano is one of the greener cars on the market due to its small size and low fuel consumption.  Indeed, the Nano gets around 50 miles per gallon, and if it were to replace the many gas guzzlers we have in America we would actually reduce pollution.  The flip side is that  its cheap price may encourage waste in a country like America because people would tend to replace Nanos more quickly than they would replace more expensive cars. 

I think a possible positive effect that will come from the introduction of the Nano is that many other car manufacturers will be working on creating cheaper cars to compete with the Nano.  However, many of these cheaper cars will not be heading to Europe and the United States, and it is debatable whether cheaper is better.


The Nano is headed for Europe in 2011 and Tata Motors intends to sell it in other portions of South East Asia and perhaps eventually the United States. Currently, the cheapest new vehicle in the United States is either the Nissan Versa or Hyundai Accent, and both of these cost nearly $10,000 so if the Nano were available I imagine it would be very popular in this economic climate where everyone is trying to save money. What do you think?  Would you purchase a Nano or one of its comparably priced competitors if it were available in your country? Do you think the availability of cheap motorvehicles will stunt the development of public transit and increase pollution?
 

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Guest's picture
Guest

I would TOTALLY buy it. I currently own a 1994 Geo Metro. Gets great gas mileage, but it has over 292,000 miles on it. It's going to die sooner or later and the Tata Nano would be perfect to replace it with.

Guest's picture
eigafan

Keep your Geo Metro, it is known to continue running after 400,000. I've driven my 1998 Metro from coast to coast with minimal problems.

Guest's picture

I would love to buy this car! From what I have heard I think that it would be great for college students!

Thanks,
Nate

Andrea Karim's picture

If the congestion is as bad as some environmentalists claim it will be (it's already atrocious), my guess is that people will soon give up driving. If I had a choice between spending 3 hours in a small car or one hour on public transit, I'd take the one hour on public transit.

And that's saying something, since I really dislike people.

Guest's picture
Songbird

I might be interested. I would need more information i.e. maintenance, life of the vehicle. You know, you usually get what you pay for. However, there are many people in the U.S. who can't afford any of our cars here, and I am sure they would love to have access to a vehicle like this. And it's probably a great, economical deal for students. Will it send the other auto makers in a spin? Maybe.

Guest's picture
Bucky

A car that gets 50 mpg?

YES. Please.

I appreciate the concerns in developing countries where this will appeal to people who do not currently have a car. So the it has the potential to greatly increase the number of people driving.

However -- and it is a BIG however -- it would be a big plus for the environment here in the US. And we are the #1 polluter in the world. Woo-hoo!

The fact is that in most every city in the US a car is required. It is not an option. As much as we might wish otherwise we aren't there yet.

How great it would be to replace all those gas guzzlers with a 50 mpg car? We all swoon over the Prius, and it doesn't do as well in the mpg department. Do we only like the Prius and other hybrids because you have to have money to afford them? Can't the less wealthy drive environmentally friendly cars too?

The low price isn't going to increase the number of cars on the road much here in the US. That's just a given at this point. It will, however, greatly decrease the number of older, inefficient and polluting cars people drive. Most people who have very limited financial means opt for older vehicles that are affordable. You know. Big ass cars from a few decades ago. With poor mileage and even worse polution control equipment.

Given the choice between a new 50 mpg car for $2,000 and an 80's 8 mpg Ford LTG for the same price, it is an easy decision.

Until we can kill the car culture here, we need to be selling the most efficient autos we can.

This car is a blessing.

Guest's picture
tracee

For me the answer is a qualified yes.
The Nano being sold in India is lacking both anti-lock brakes and airbags(neither is required there). I don't think I would feel comfortable driving a car that small without airbags. If added safety features didn't increase the price too much then I would buy one, yes. I would skip the optional radio and absolutely spring for the optional AC(as anyone who lives someplace where temperatures can hit triple digets 4 months out of the year can understand)

Guest's picture
Designguru

The Nano that goes to the Europe and the US will be fitted with airbags and ABS and it will cost more than $2000. At present the nano available to the India market will be in three variants. One without aircon and two version with aircon. Nano will have more variants when it arrives in the US; like hybrid and Biofuel varaints.

Guest's picture
Steph

I would totally buy one of these. We are a one-car family at the moment because between payments, the high insurance rates here, and our state's charming "vehicle tax" and whopping registration fees, we can't afford a second car. This would get much better MPG and save us money on my husband's daily commute; I could use our current car for things closer to home.

We would make use of public transportation...if there were any where we live. There is not so much as a bus line within two miles of our house, and even getting to that lone outpost of a bus stop requires crossing FOUR freeway on-ramps, because there are no sidewalks. It's all well and good for environmentalists to moan about how people need to use public transportation more, but they seem to come up short on ways to make it accessible to everyone. Smaller, more fuel-efficient cars are a good start. If you can take the first step of getting people out of that 'OMG I need to drive a huge car!' mindset, maybe more changes will follow.

Guest's picture

The part of your post that stuck out to me most was that it would drive the competition to find cheap, efficient cars. Honda, Hyundai, and all the other big cats need to get in the game and give us some budget-friendly/eco-friendly options.

Guest's picture
Guest

Basic economics will keep the TATA out of the US. The cost of meeting US antipollution and occupant safety standards will run the cost of the TATA to the $10K plus range in nothing flat. Add the mechanical penalties (weight and inevitable power reduction) for the pollution control equipment the car will need and you're going to get way less than 50 mpg. Remember folks, the wonderul specs are for a country with extremely limited safety and smog rules. The concept is rather reminiscent of the immediate post-WWII European vehicles by Messerschmidt, BMW and Renault. In other words, extremely basic & functional. You will get four wheels and a weather tight cabin and not much else.

Guest's picture

I would definitely buy one if they were available in the US. It's so time that we in the States start transitioning away from the inflated "need" that we feel for such large vehicles. It's long overdue to have a high number or vehicle options that get over 35 mpg.

So although it may not be good to have such a low-priced vehicle available which could greatly increase demand, thus potentially creating a larger pollution problem, I would suppose that sooner or later, more and more citizens of rapidly developing countries will have ever-increasing amounts of disposable income, and will be able to afford even more expensive cars anyways.

And who can blame them? It's really tough for us in the US to try to deny others the same dreams that we have attained and become accustomed to.

So in summary, if they are going to end up with cars anyways, then I would definitely support starting with an option of this sort, rather than the gas guzzlers that our society was developed around so long ago. 50 mpg is a great start, and the low price should only just help increase competition and bring other carmakers to the table.

Guest's picture

I'm an Indian and even I was sceptical that Tata could pull off a 1 Lakh ($2000) car !!. They did pull it off and in fact almost all the reviews say that the car (yes, it is a real car - and not a go cart) is more spacious than some of the cars already being sold and that it can comfortably sit four six feet tall adults!!. As mentioned in the article it has a claimed mileage of 50 miles per gallon !!

The car has passed India mandated crash test standards. Yes, it does not have an airbag or ABS but neither does 90% of the cars sold in India have that. The European version which will be sold in 2011 will have airbags, ABS with EBD and a 5 speed auto box.

I plan to buy one as soon as I can.

Guest's picture
Sac

so you are wondering about the environmental impact? Let's say there's latent demand for 15 million Nanos in India. at current projected production limits, it will take Tata 47 years (!!!) to make that many Nanos.
And that's just over ONE year's automobile sales in the USA (was around 12 million per year - a majority being gas-guzzling SUVs, pickup trucks and luxury sedans - before the recession hit.. probably be 10 million this year).
so, green warriors, chew on that!!

Guest's picture
Olivia

We buy used cars. We've always bought used cars. To be able to afford a new car, any new car, is way cool. Since my husband needs a car for work, a small efficient vehicle is a great option for him. The only down side. Can it handle a couple of kids, plus a baritone horn, two gym bags, and two backpacks?

Guest's picture
Brendon

Tata Nano will be a sure boon for all middle class families in India. Apart from that it will also induce a cost cut by other manufacturers.But it remains to be seen how long the Tata can sustain its 1Lakh Car tag.

Paul Michael's picture

In Europe, standards for fuel efficiency are much higher. Check out the VW Bluemotion, which does a fuel-sipping 62mpg. Way more expensive though, but it's a VW, not a Tato Nano.

http://www.treehugger.com/files/2006/07/volkswagens_pol.php

Guest's picture

The whole question of wether or not an inexpensive vehicle is good for Indians is for individuals there to decide for themselves.

The whole question about wether or not such cars should be available presumes its our right to control what choices others have.

Guest's picture
Amy K.

The nano in India has a 623cc 2 cylinder engine, and a top speed of 65mph. Add the airbags and other safety features, and a desire for a top speed a little higher, and the engine will have to be bigger.

I foresee a $7,500 car with 42mpg highway, and I think it would sell well. The Kia Rio of 5-10 years ago was angling for the same market, with a similar feature set, lower fuel economy, and retail price of $8,895.

Guest's picture
Momma

With car prices so high, and the fear that any vehicle I get for my (nearly) 16 year old will end up piling as many friends as she can into my mini-van, I'm really digging this car. Too bad there's no way to get one before she's out of the house and gone.

Guest's picture
Dave

That thing looks like a deathtrap to me. If this thing starts selling in the US, you are going to see a lot of them underneath Expeditions and Hummers.'

Just sayin'

Guest's picture
Guest

They are planning on adding a spinning cutting blade on the bottom for future American models so people can cut their lawns with it.

Guest's picture
Bettie

Another thought was I live in Minnesota, this is not something I would drive in a bad snowstorm! That would be an accident waiting to happen. And I am sure I would have to be pried out of it in an accident with a can opener. There are people in my area of town who have the Mini Cooper and the littl electric cars. But on snow days they are all driving their other vehicles. So maybe as a nice summer day second car. Cannot imagine going long distance in it either.

Guest's picture
Max

If this car were to come to the US it would not be as cheap as in India. There is the fact that there are no safety features whatsoever and adding them would make the price in the US above $5K for sure. Though it's only competition would be from the Smart Car and it would still be about half the price of those so it would be in good shape. More info about the Nano story here, http://www.newsy.com/videos/world_s_cheapest_car_hits_market/

Guest's picture
Denise

I think I would buy. The max speed limit being 65 is an ideal feature for a teens first car and the mpg is great. Along with price it seems to be a good option.

Guest's picture
Franklin Grimes

I understand the major componentes cant be taken out for servicing, built in obsolesance.

Guest's picture
TipsGoda

in my opinion although its saves a lot money,it will not get a huge buzz outside India.Why? becoz people nowadays goes for image and driving the world cheapest car certainly not going to be in your facebook album.

Guest's picture
Guest

This is great news for Tata Motors, as well as for those whose incomes didn't allow for their own car in the past. The Nano is going to make a big difference in the lives of a lot of people, not only for the freedom of movement, but also in increasing the potential for additional commerce (taxis, hauling products longer distances, etc.).

I read a great article about the Nano, though it is actually part of a series of articles. The latest one is titled "Tata Releases the Nano, No Thanks to Mamata Banerjee" and it is found at http://economicefficiency.blogspot.com/2009/03/tata-releases-nano-no-tha...

Apparently, the politics behind building this car is out of this world.

Guest's picture

This is big fail from a human point of view. Indian cities barely enforce traffic rules. Cars and motorcycles shoot in an out of throngs of pedestrians without regard for what side of the road they are driving on.

My in-laws just returned from visiting family in Gujurat, India and relayed news that my their niece and her husband were AGAIN in the hospital and were severely injured in an auto-related accident. Two years ago that same niece was hit in auto-related accident and was in physical recovery for week.

The death toll from auto-related accidents in India is very high statistically. Imagine what it will be like with even more poorly trained drivers showing off their Tatas.

http://www.india-server.com/news/india-has-highest-number-of-road-4241.html

http://www.iht.com/articles/2007/04/12/asia/letter.php