I am a big fan of a car for $US2500, but is it all that efficient and cheap? I’m a car enthusiast but have never worked for a car manufacture, meaning I am not the foremost authority on this subject.
The Tata Nano will succeed in India. India has a population of a billion and only 7 of every 1000 people own a car. The Nano will fill that gap, and only because that is all it is, a car. No radio, no air conditioning, no passenger side mirror. No bells and whistles to be seen (at least until you upgrade to the higher priced models).
In the developed countries there is a big number who spend what they can afford. If they are high earners they go luxury, if they are low they go for budget. The Tata, if the price was to be kept in other countries, would be a whole new level, an almost disposable level.
In Australia, to get to work and back every week I spend around $AU80 on petrel. In a year I would spend around $AU4000 not including servicing and other small costs. If I was to buy a Tata every year, with its 5litres per 100km’s efficiency, it would cost me around $AU4000 including petrol. No servicing required, just throw it out when it stops working.
That is possible if the car was to cost the labelled $US2500 all over the world, but unfortunately this can’t be done without sacrificing a lot. Different countries have different weather and road conditions. Different countries have different safety, tax’s and emission laws. The price of the $US2500 could sky-rocket, If the price was to go north to much, considerations would have to come into account, such as the cost of adding the features you would use to the car, such as air-conditioning, and reliability over other car manufactures.
On top of that, the cost of distributing a vehicle such as this in countries outside of India is going to be higher. Too train and pay a mechanic in India may be cheap, but it isn’t cheap in Australia. How about further advancement? Will they have to reply on the profits from its other subsidiaries to push the Nano’s development?
On the efficiency part of the car it is truly incredible, but efficiency is only half the battle. Whether you car uses 5 litres every 100kms or 50 litres every 100kms, it is still better to use 0. If 8 people out of that 1000 was to be finally able to afford a car, that would put an extra million cars on the road.
The Nano will change the way car manufactures do business. Lets just hope that change is for the better.