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The Race to Build the Cheapest Car in India
The Indian car market is witnessing a revolution with the entry of multinational car manufacturers. Many car companies have already carved a niche in the luxury vehicle segment, while some others have embarked upon manufacturing low-price cars for the large middle-class populace who have seen an enormous growth in purchasing power due to IT and the rapid economic growth.
Tata Motors and Bajaj Auto Limited are some of players in the race to build the world’s cheapest car. Mahindra & Mahindra is also involved in developing a low-cost Sport Utility Vehicle. Tata’s long-awaited ‘People's Car’ is expected to be launched in October, 2008. Its prototype was unveiled at the 2008 Auto Expo at Delhi and is called the “Nano”.
The European-style Tata car has been modeled on a Maruti Zen Estilo or Tata Winger bus. It will be a paired body with Scandinavian minimalistic design. Its price may range between Rs.1 Lakh and Rs.1.20 Lakh (ex-showroom). The car will generate a power of 33 horses and reach an estimated speed of 65 km/h with ease.
Bajaj, who has been a keen player in the Indian 2-wheeler and 3-wheeler market, refuses to bow down before the hype created by the low price tag. Chairman of the company Rajiv Bajaj has said recently that his car will not be priced at Rs. 1 Lakh, though it will be priced competitively. According to him, his car would be an economical car. He says it will not be a problem to produce small cars as there is not much difference between a 1-litre engine used in a motorcycle and the 600/800 cc engine used in a small car.
As per the design of its concept car unveiled the day before the Delhi Auto Expo, the Bajaj car may have prominent fused bumpers and a sloping roofline like that of the electric car Maini Reva. This car will be priced higher than the Tata Nano. The company has developed a platform called LITE for the car. Its transmission will be a cross between manual and automatic. Bajaj Auto is thinking of bringing out petrol and diesel versions, but the car will see light of the day only in 2010. Bajaj prefers to play a wait-and-watch game. It is in an advanced stage of talks between the French carmaker Renault and the Japanese Nissan.
The prevalent competition among the car manufacturers will enrich the market and provide customers with choices not only in models but also in prices. Whatever be the outcome of the race between the car makers, it will be the lower middle-class customer who will emerge victorious. The Indian middle-class is set to outpace that of China in a couple of years, so it does make business sense to cater to the needs of this class.
