Bodacious Tata: India Delivers World's Cheapest Car

Bringing a cheap car to the masses in India may not be good for traffic in mega-cities or for the environment. But the German media gives a friendly reception to the new ultra-small and ultra-cheap Tata Nano. Besides, the Nano has lower emissions than the average VW.

When it comes to cars and the freedom that comes with the open road, few countries are as enthusiastic as Germany, which invented the autobahn and coined the term Fahrvergnügen. So it comes as little surprise that the media here was blanketed with coverage of a new car from India that is supposed to do for developing countries what the Volkswagen Beetle did for the West -- make an affordably produced car for the masses.

Newspapers here are hailing the arrival of the Tata Nano, which sounds a bit like the latest iPod model, with headlines like, "When will we be able to buy the cheap car?" "A Car for the People," "The Bollywood Car" or "The New Volkswagen."

They also give the world's cheapest car a generally warm reception, writing that while the vehicle may not be technically impressive now, Tata works closely with European heavy-hitters like Bosch and Daimler and will likely become a force to reckon with in the coming years -- especially if it succeeds in acquiring Jaguar and Land Rover.

"There's no reason for the West to fear this development," writes an editorialist in the German daily Frankfurter Rundschau. German cars are designed for people with greater purchasing power and in that sense it won't take away any jobs. And Indian consumers won't be the only winners. "If Tata is able to rise to become a major automobile manufacturer, India's economy will also profit -- and it won't just create jobs for IT workers and tea pickers."

A Curvacious Smart

Selling for about €1,750 ($2,500), the subcompact two-door, four-seater looks a bit like a slightly more curvacious Smart. It's also spare on features -- there's no radio, no air conditioning, no passenger-side mirror and only one windshield wiper. But that may be missing the point, the Frankfurter Allgemeine Zeitung writes in an editorial: For families and small businesses in India who up until now have been accustomed to driving rickshaws or scooters, just putting a roof over their head would be the equivalent of making the ascent to "luxurious transport."

Nano has a 33 horsepower, two-cylinder engine that, according to Tata, consumes a European average-beating 20 kilometers per liter (47 miles per gallon) and can reach a maximum speed of 105 kilometers (about 60 miles) per hour.

That's not nearly enough power to attract spoiled European or American drivers; and it is unlikely, the paper notes, Tata will export its car to Europe or elsewhere the West anytime soon. Just bringing the car up to basic European standards for accessories and meeting vehicle registration requirements would drive up expenses into the same region of cheap subcompacts already being planned for that market by European carmakers. And while the car might meet Indian safety standards -- the company also claims the car meets European Union environmental standards -- it lacks such basic accoutrements as air bags, power steering and air conditioning.

It still offers enough power for first-time car owners in India's burgeoning middle class, which is expected to be one of the fastest growth markets for the automobile industry in the coming years. Right now, only 8 out of 1,000 people in the country own a car. Ferdinand Dudenhöffer, director of the Gelsenkirchen, Germany-based research institute CAR, estimates that by 2020, just about half of global car sales will be made in emerging economies like India and China. According to the daily Der Tagesspiegel, Dudenhöffer estimates that already by 2015, there will be a market for at least 10 million cheap cars falling in the €2,000 to €10,000 price range like the Nano.

This year alone, Tata wants to build 250,000 Nanos, expanding production to 1 million in 2009.

It's a nascent market that European and American carmakers are also seeking to exploit. France's Renault introduced its Dacia-Logan budget car in 2004 for €5,000. Renault and Ford are both considering partnerships to manafacture low-end cars in India, and VW, Toyota, Honda and Fiat also want to get into the subcompact market in developing nations.

'The Indians Have the Right to Repeat our Mistakes'

An onslaught of cheap cars in developing countries with mega-populations will also have a deleterious effect though. According to the Frankfurter Rundschau, there's only one loser if the Nano is a hit in the country with the world's second-largest population: the environment. Likewise, the left-leaning Die Tageszeitung notes that the Nano could worsen congestion in cities like Delhi and that the United Nations' chief climate scientist, Rajendra Pachauri warned in December that the car is already giving him "nightmares."

Nevertheless, the paper dismisses criticism of the car's carbon dioxide emissions and chaotic traffic in the country's megacities as "inappropriate," at least as long as an unchecked car culture continues to exist in industrialized nations. Besides, the emissions of the new Indian 'people's car' are markedly lower than those of the average Volkswagen. "One can regret the fact that the automobile is now seen worldwide as a status symbol and the embodiment of freedom and mobility, but the Indians no doubt have the right to repeat our mistakes."

"There's only one way for a climate catastrophe to be avoided," the editorial concludes. "Industrialized nations need to set a better example for the rest of the world. In addition to policies that take the actual societal costs of automobile use into account, a massive expansion of public transportation is also needed."

The conservative Die Welt concurs, noting that in Germany the autobahns were invented at the same time as the VW beetle. "At some point Tata will have to develop the world's cheapest subway train."

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