Retail News Update

Ratan Tata on Thursday delivered on the promise he made four years ago with the launch of the “people’s car”, even if buyers will have to fork out a little more than the much-talked about Rs 1 lakh price tag for the basic model. 
 
They will have to pay an additional 12.5 per cent value added tax, transportation cost and an insurance charge. But that will still be about half the cheapest car in today’s market, the 25-year old model from rival Maruti Suzuki. 
 
Christened Tata Nano, the four-seater will be available in the market by the second half of this financial year in three variants, including one with an air-conditioner. 
 
Tata Nano will be have a 623 cc/33 bhp rear-mounted petrol engine and the “boot” (storage space) in the front. The car will be sold with a four-speed manual transmission, but work is on for an automatic transmission as also for a diesel engine, 
 
Tata said, after he unveiled the car at the Auto Expo in New Delhi. 
 
Tough price
Tata Motors has spent Rs 1,500-1,700 crore for this car project, including the proposed plant in Singur in West Bengal. 
 
Tata pointed out that while the Rs 1 lakh price tag was given by the media, he decided to take on the challenge. 
 
He hinted that inflation could make it difficult to maintain the price tag. “My greatest fear is inflation. With steel and tyre prices going up we can’t hold the price which we have held emotionally,” he explained. 
 
350,000 cars per year
Tata said that the initial target production volume would be 250,000 cars per annum on two shifts, expandable to 350,000 per annum on three shifts. 
 
In earlier media interviews, Ratan Tata talked about a one million production target by 2010. A similar indication has been given to component suppliers during price negotiations. 
 
Over 500 engineers worked on the car for four years. The company has already applied for 34 patents so far. 
 
‘Beating Maruti 800’
Benchmarking the compact but curvy Nano against Maruti 800, Tata said his new car was 8 per cent smaller than the Maruti 800 on the outside, but 18 per cent more spacious inside. 
 
The Nano is expected to give a fuel economy of 20 km per litre or 50 miles a gallon. 
 
Allaying fears that the car would not meet emission and safety standards, Tata said the Nano met Bharat Stage III emission requirements and was set to pass the Euro IV norms as well. 
 
He said the car had cleared the frontal crash test and would undergo the side and offset crash tests required by European standards. 
 
Tata explained that construction of the production facility in Singur was delayed due to flooding in the area and that Tata Motors was trying to “crash the time” to the extent possible