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Friday, January 11, 2008

Tata's 1-lakh a reality- Automobiles

NEW DELHI: The Nano is here. Ratan Tata seems to have achieved the feat of showcasing to the world a one-lakh rupee car that meets the specs of an international affordable peoples' car. The small beauty claims to meet all the current safety requirements of a modern day car and has pollution levels that are even less than those of a two-wheeler.

But Nano will have to shake off the 'one-lakh rupee' tag as the on-road prices will also include VAT, transportation, insurance and road tax component. So, the on-road price may actually go much beyond one lakh.

Also, the company is polling prospective consumers for value ads that could be on offer in the future variants. With the additional features, matching the pricing of the other low-end small cars in the market will be a big challenge.

"Infrastructure is a major concern with India and I accept that we are behind our neighbours in the area. And India is working towards it with a new roads policy. But in the next five year, Tata Motors is only targeting to have 500,000 small cars that will constitute just 2.5 per cent of the total number of passenger vehicles in the country. With those numbers, the small car can hardly be an infrastructure nightmare as it is made out to be," Ratan Tata said unveiling the company's pride at the Auto Expo 08 on January 11 on Thursday.

The Nano with a 624 cc engine, will give a mileage of 20 kilometers per liter (50 miles a gallon). As per the safety norms, it has passed the full frontal crash test, the offset and side-crash test to meet the international safety norms. The legroom is expected to be 21 per cent more than Maruti 800. The car meets the Bharat 3 (Euro 4) emission standards.

The car that will come in two variants - AC and non-AC, will come at a dealer price of Rs one lakh plus VAT and transport charges.

"The car will cost one lakh and only because a promise is a promise," he said brushing aside concerns over cost escalation and increase in raw material prices.

However, it needs to be seen, how Maruti Suzuki reacts to the challenge. It's already offering its Maruti 800 at an ex-showroom price of 1.8 lakh. The winning edge will depend on Nano's ex-showroom price that would be inclusive of dealer margins, taxes and transportation charges. The actual story is yet to unveil. On road prices of Nano will also include insurance and road tax component. So, the on-road price may actually go much beyond one lakh.

For the Tata Motors' team, this just seems to be the beginning. The company is busy polling prospective consumers on how best to pack the car with the features desired by most. On the company website, consumers have the option to exercise their choice regarding the air-conditioning, metallic hues, body coloured bumpers, front two power windows, central locking, fog lamps and more.

The question, however, is: The consumer will obviously pay more on addition of some of the 26 options that have been included in the survey and can be customized for the consumer later. So will that still be a one-lakh car?

 

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