Tata Nano, World's Cheapest Car Makes Its Debut

PUNE, India, March 23, 2009 — -- The car may be little, but it's become a very big deal. Words like "revolutionary" have already been attached to the Tata "Nano," although few have actually seen it up close.

After months of delays, Tata Motors in Mumbai announced today that the Nano would go on sale in India next month. And in a surpise move, the company said it plans to eventually sell the car in the United States.

Last week I had a rare chance to test drive the Nano. And while the ride itself was not exactly revolutionary, it was, at the very least, charming.

With its zippy 2-cylinder aluminum engine and unusual shape, the Nano drives like a cross between my '96 Honda Civic and a lawn mower. The car is only about 10 feet long and less than 5 feet wide. It is expected to get about 54 miles per gallon.

Clearly, with only 36 horsepower, and a top speed of 65 miles-per-hour, the Nano would not make the 800 plus-mile drive from New Delhi to Mumbai easily, but it can maneuver around cities and villages without difficulty.

Marketed as the "world's cheapest car," the Nano's basic version costs $2,000. And by basic, Tata means basic: The console comes with a speedometer and fuel gauge. That's all. No flashing lights, no onboard GPS system.

To maintain the low price, the car is missing just about everything one would normally expect in a car: air conditioning, a radio, power windows, power steering and air bags. A luxury version with some of these add-ons will be available for a higher fee.

Application forms for the car will be in 30,000 locations in 1,000 cities. The first cars are expected to be delivered in July.

Originally, the Nano was to be released in late 2008 but was delayed due to violent protests from farmers and politicians outside its factory in West Bengal.

The delay could be costly for Tata, analysts said. Like most carmakers, Tata is suffering in the global economic downturn. It is reportedly struggling to make payments on loans it took out to fund its recent purchase of British carmakers Jaguar and Land Rover.

Tata Motors' owner Ratan Tata was inspired to create the Nano when he saw families riding on motor scooters in the rain; he wanted to build something affordable to protect them from the elements.

His seemingly small notion turned into a source of Indian pride. At last year's prototype unveiling, both car fans and journalists stormed the stage.

"With humility, I have to say that all of us have been overwhelmed by the reaction that has taken place. All we set out to do was move Indian families at an affordable price," Tata said at a press conference Monday.

India: Motor Scooters to Cars

India sells between 7 million and 8 million motor scooters and motorcycles a year. The country is one of the world's largest car markets, second only to China.

Darius Lam, an automotive expert based in Mumbai, said the main objective for Tata is to position the Nano between two-wheelers and cars. The second-cheapest car in India goes for double the Nano's price.

"They are trying to position it in the middle of the gap so that a lot of people can transition to a car at a much earlier stage in their lives," said Lam.

Nano designers created the car, keeping in mind India's roads full of potholes and excessive speed bumps. As a result, the car has a reasonable undercarriage clearance and feels much higher off the ground than one would expect from such a small vehicle. The turning-circle diameter is 8 meters, so doughnuts will likely make you dizzy and three-point-turns are no longer necessary.

Exciting and "revolutionary" as the car may be, many fear it will lead to overcrowding and overpollution of India's already crowded and polluted cities.

"Today in Delhi, cars and two-wheelers occupy more than 75 percent of the road space, but they meet less than 20 percent of the travel demand," said Anumita Roychowdhury, associate director of the Center for Science and Environment in New Delhi.

"If [we allow] these cars to come into our city and take and marginalize public transport, then the pollution challenge, the energy challenge, the security challenge and the climate challenge we face today ... we will just not be able to take that on," Roychowdhury said.

Tata Motors owner Ratan Tata made the surprise announcement that the company plans to release a version of the car in the United States.

"Initially, we didn't plan that we would market it in the U.S. at first, but due to the change in the economic climate and global crisis, we're attracted by this idea," said Tata.

At the earliest, the American version would arrive in 2½ years.