The Truth About Cars » Nano The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sun, 27 Jul 2014 20:45:49 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Nano Best Selling Cars Around The Globe: Understanding The Indian Car Market Fri, 11 Apr 2014 16:12:27 +0000 Datsun Go India March 2014. Picture courtesy of What Car? IndiaThe Datsun Go starts at US$5,340. Only in India is such low pricing possible at the moment.

A recent stay in India has enabled me to get a much better understanding of the Indian new car market and its dynamics which have very unique characteristics. Understanding India is essential in today’s worldwide automotive scene – a lot of the innovation taking place here will soon be applied to other developing markets (like Africa).

1. Why India matters

Ever wondered why so many India-exclusive new cars were unveiled at the Delhi Auto Show in February compared to the relative small size of its new car market (3 million units in 2013 vs. 21.9 million for China)? That’s because on top of the enormous growth potential, making and selling cars in India requires a very different set of skills. And the manufacturers that are getting good at it are taking a decisive advantage into succeeding in tomorrow’s developing markets, where cost-cutting will be the most important factor. Many of the techniques being learned in India will come in handy when developing cars for Africa, which is considered the final frontier for automotive growth.

To be successful in India, cars need a price tag so much lower than in most other markets, that new thinking is needed. An Indian trademarked way of innovating that is adapted to local conditions, constraints and revenue levels. The old way of creating low-cost was to engineer down from more sophisticated products by cutting cost through tried-and-tested platforms and economies of scale. The new way is to engineer up from scratch a product that is far cheaper, with a mix of bare bones elements and the latest tech features. Example: the $100 laptop. This process has been dubbed ‘frugal engineering‘ (achieving more with fewer resources) by Carlos Ghosn, or ‘bottom-up innovation’.

Datsun Go What Car March 2014bNo radio and CD player in the Datsun Go

2. Bottom-up innovation at play

Indian manufacturer Tata was the first to bring bottom-up innovation to the car industry with the Nano, ‘the cheapest car in the world’ at US$1,700 when unveiled in 2009. The Nano turned a lot of carmaking conventions on their head. It uses a modular design that theoretically enables a knowledgeable mechanic to assemble the car in a suitable workshop. It also includes numerous lighter components, from simple door handles and bulbs to the transmission and engine parts, enabling a more energy efficient engine. The Nano is one of the shortest four-passenger cars on the market, yet it allows for ample interior space.

These ‘ultra-low cost’ cars can end up being more user-friendly, if sophisticated. One great example: the new Datsun Go does not have a radio or CD player (even optional), only an auxillary port and a USB charging point, which means you can only listen to music stored on a portable device. On the one hand, not having a radio seems unnecessarily stingy. After all, even Tata kept it optional on the Nano. But nowadays, most music is stored not on physical media like CDs, but on digital devices. The lack of a radio is, arguably, a more user-friendly decision that also saves money.

Renault Duster India March 2014What Car India says the Renault Duster ‘doesn’t feel premium enough’ for the price. Wait what?

3. Low cost is premium

Car prices are on a drastically different scale in India:  they are not just a little cheaper, but in a different ball game altogether. That’s because salary levels cannot compare with Western countries. A young taxi driver earns around $150 per month which is considered a relatively good revenue. A Taj Mahal entry ticket is INR750 ($12) for tourists but INR20 ($0.35) for locals. And all prices are in line with this, including cars.

This way, models considered low cost in Europe are borderline premium in India. And this is where Renault’s strategy of selling Dacia models under the Renault brand in emerging markets takes its full meaning. Starting at US$15,200, the Renault Duster is not the cheapest SUV/MPV on sale in India, and local magazine What Car? says ‘it doesn’t feel premium enough’ for the price. The Duster failing in the value-for-money equation is something I never thought I would see printed anywhere. But in India it makes sense.

Maruti Alto 800 India March 2014. Picture courtesy Matt GasnierThe Maruti Alto 800 starts at US$4,740 in India.

For a better idea of Indian prices, consider this: a Tata Nano starts at US$2,890, the Maruti Alto 800 at $4,740, the Hyundai Eon at $5,400, the Maruti Celerio at $6,280, the Honda Amaze at $8,330 and the Honda City at $12,000 (though the City is considered a more premium, Japanese-made car). A very large proportion of new car sales are happening well below $10,000. As far as models sold across different continents, they typically sell for half the price in India than in France. The Maruti (Suzuki) Swift starts at $8,500 in India vs. $16,100 in France, the Nissan Micra at $8,800 vs. $16,000, VW Polo at $9,500 vs. $17,700 and Ford Ecosport at $12,200 vs. $28,800!

In other words, it is impossible to truly compete in the Indian market without manufacturing locally. If you want to undercut local behemoth Maruti by selling ‘more car for the money’, you have to come up with completely new ways of thinking a car – the Datsun Go being a great example. This price structure becomes relevant on the world scale when you take into account that most African countries have even lower average monthly revenues. Manufacturers that will manage to build and sell an attractive car for this type of money will have all chances to succeed in Africa when it booms, and it will.

Tata Nano used. Picture courtesy of What Car March 2014A daunting task…

4. A hate of used cars

In this context, with a starting price at launch of roughly US$1,700 in 2010, Tata was hoping to sell millions of Nanos in India and even expected it would single-handedly increase the total size of the local new car market by 65%. It didn’t happen. And while this situation has boggled me for a long time, interacting with Indian consumers and exploring local roads with my own eyes has started to bring a few explanations to light.

First and foremost, the long-term view about low-cost cars is that they compete with used cars in the mind (and wallet) of consumers. It’s a little less true now in Europe where Dacia has somewhat shaken off its ‘dirty’ low cost image, but it was the case for the first generation Logan. The thinking was that as long as one could buy a new car for the price of an equivalent used one – but this is not true in India.

Tata Nano India. Picture courtesy of caranddriverIndia sees trade-up from motorcycle to new car, bypassing used cars altogether.

For example, a comparo between a brand-new Skoda Superb and a 4-year-old Mercedes E-Class in this month’s issue of What Car? India gave the Superb as winner. The conclusion that they came to isn’t terrible difficult to understand, but their reasoning provides a lot of insight.

“Car buyers in India usually shy away from used cars. The second-hand car market is still a big fat grey area, there is the added scare of buying something that’s been abused. If the Mercedes requires major work, it could become exorbitant. Yes, Skoda has a poor reputation for service and parts are expensive here too. And ‘I drive a Skoda’ doesn’t have the ring of ‘I drive a Mercedes’. Still, our choice here is the Skoda.”

Buying an entry level car in India is more a choice between replacing a motorcycle/scooter or trading up to a new car. The ‘used car’ box is bypassed altogether, as there are still too many unknowns associated with it and the used car market is far from regulated. It has become a bit of a vicious circle with cars depreciating extremely fast.

So why did India not choose to trade up from motorcycle to brand new Nano?

Delhi Agra Expressway. Picture courtesy of automark-india.comThe Yamuna Expressway opened in 2012, cutting the Delhi-Agra travel time from 5 to 3 hours.

5. Interstate travel in style – What the Indian consumer really wants

In their assessment of the Datsun Go, What Car? India says

“it’s clear that Datsun tried to make it look anything but budget. The Go has a peppy engine, spacious interiors and is easy to drive. It seems like a lot of car for the money.” 

An observation that goes against most Western observers that qualify the Go as nothing more than a bland and cheap copy of the Nissan Micra. Not in India. There, it is robust, handy and stylish enough to earn the right to be taken on interstate travels with pride.

And that’s the key. What can an Indian family do with a car that it cannot with a motorcycle? For them, it’s the ability to make long-distance visits to their extended families. The family takes a central role in any Indian person’s life, and only 20% of the entire population of India lives in big cities – stressing the need for interstate travel between smaller towns. Along with cars, the local infrastructure is fast improving – the Delhi-Agra Yamuna Expressway I travelled on was only 2 years old.


Tata Nano driving speed. Picture courtesy What Car India March 2014“Can I push my Tata Nano hard?” The answer is no.

To understand the failure of the Tato Nano, you have to take a journey to India’s motorways, where cars like the Go can often be seen blazing along at 150 km/h, despite the official 100 km/h limit. It becomes a little more obvious the Nano is, paradoxically, not cut for India. A What Car? reader asks “Is it safe to drive the Nano at 80-100km/h?” The magazine responds

“the Nano is fundamentally a city car and isn’t designed for high speeds. Driving it close to its maximum speed (105km/h) isn’t advisable. For the same money, it’s best to pick up a slightly used car like a Maruti Alto which feels more secure at highway speeds”.

So the Nano is ‘the cheapest car in the world’, but one cannot get out of the city with it, which limits it to a 2nd or 3rd family car, and Indian families that can afford a 2nd or 3rd car would not be seen dead in a Nano. Not stylish, too frugal, not a ‘real’ car. The loop is looped. The Nano could only attract posh city-dwellers that don’t really need a car and to them it’s not attractive. Now I’m generalising a bit, but you get the idea.

Hyundai Grand i10 Maruti Swift. Picture courtesy of zigwheels.comMaruti Swift & Hyundai Grand i10. Maruti and Hyundai are in Datsun’s line of fire. Tough targets?

What next?

My stay in India came at an important time in the local car industry: when Nissan, reviving the Datsun brand to make it its entry offering, launched its first ‘ultra low cost’ model, the Datsun Go – but don’t go calling it ultra low cost in India – Carlos Ghosn did not mention the word ‘low-cost’ once when he unveiled the car last year. Initial sales figures will show very quickly whether this adventure has been worth all the ‘bottom-up innovation’ trouble. Datsun has already announced its next two Indian launches: in late 2014, the US$7,500 Go+ MPV will arrive and in 2015 the US$4,990 Redi-Go hatch. If successful, expect Datsun to start launching in Africa very soon, and the start of a fascinating new chapter in the history of world automobile will have been written.

Matt Gasnier is based in Sydney and runs a website called BestSellingCarsBlog, dedicated to counting cars around the globe.

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Wards Auto: Industry Analysts Unsure If Ford Gained Advantage With The Aluminum 2015 F150 Wed, 19 Mar 2014 18:32:20 +0000 2015-Ford-F150-Front
Ford dropped a heavy light weight military-grade aluminum gauntlet with a metallic thud when they announced that the aluminum-intensive F-150. With up to 97% of the body being made of aluminum, and with Ford’s claims that it has dropped 700 pounds off the truck’s curb weight, the industry took notice. So much so, that GM announced their plans for an aluminum Chevrolet Silverado and GMC Sierra shortly after the North American International Autoshow, where the F150 was debuted.

According to WardsAuto reported that some analysts are not quite as impressed, and are unsure whether or not it will make as large of an impact as expected.

Part of the concern comes from recent advances in steel, with high strength steel seeing widespread use in the industry, and more importantly, Ford’s competitors. Craig Parsons, automotive-president of Nanosteel, told Wards, 

“If you look at steels out there years ago, you couldn’t lightweight; they weren’t strong enough and you couldn’t (form) the shapes needed. Aluminum has come a long way, as well, but I think technologies like nanosteel are going to give automakers alternatives to aluminum so they can do lightweighting with better geometries and thinner materials.”

Parsons points at the current 2014 Chevrolet Silverado and GMC Sierra as an example of high strength steel’s effectiveness. He claims the ’14 GM trucks are 350 lbs lighter than the current generation F150. With Ford claiming a 700 pound weight savings from their current truck, the difference between the ’15 F150 and ’14 GM trucks would only be around 350 pounds, according to Parsons; a fairly negligible number when the difference in options on a truck can swing the curb weight by over 500 pounds, according to GM’s specs on the ’14 Silverado 1500.

“Each generation of truck is lighter. It’s always the most recent introduction that is the lightest in its class.”

Another issue is cost. David Cole, chairman of AutoHarvest and chairman emeritus for the Center for Automotive Research, touches on the issue

 “It’s a big roll of the dice. Whether it’s an advantage or not is yet to be determined. The trade off from the consumer perspective is, ‘What is it going to save me vs. what’s it going to cost me? That’s an important part of the discussion.”

Along with the higher material costs and production costs with sheets of heat-treated aluminum, Ford is also pushing for more advanced engines. The direct-injected and turbocharged Ecoboost engines have been pushed hard by Ford in the current generation F150. At the time of this writing, the EcoBoost V6 is $1,000 more than the 5.0L V8; and $2,000 more than the base V6. Only the rowdy 6.2L V8 costs more.

Richard Schultz, a project consultant at Ducker Worldwide, mentions that

“It’s more expensive, but you have to add in the value of scrap, which is very valuable. And when you save so much weight you can make suspensions and other parts smaller and thinner.”

Cole touches on anther key point, the 2017 review for the 2025 CAFE regulations. Specifically chosen to take place after the next election, the next president could cancel that F150‘s chance if he or she chose to relax the standards. Ford would have spent millions to push out the technologically advanced F150 only to have the goalposts moved. Ford may enjoy having the most fuel-efficient pickup in the market, but the extra costs of the new aluminum body and engines could alienate buyers, sending them to cheaper, more traditional pickups.


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World’s Cheapest Car Not A Good Idea Tue, 24 Jan 2012 12:36:49 +0000

Launching the “world’s cheapest car,” the Nano, into one of the world’s fastest growing auto markets, India, looked like a surefire concept back in 2009.  Today, it looks stupid. Like many surefire concepts, the Nano turned out to be a dud. Says India’ Economic Times:

“After several years of disappointing sales, it has now become clear that the snubnosed hatchback’s unique selling point — its price — was actually a commercial sticking point. 
Rather than embracing the Nano, the status-conscious consumer base that was its prime target has largely shunned the “cheap” tag of the $2,800 vehicle and opted for slightly pricier rivals, or second-hand vehicles costing the same.

The Nano plant, with an annual capacity of 250,000 units, is running  at less than 50 percent capacity. It produces only 10,000 a month, says R Ramakrishnan, business head of Tata Motors passenger cars. Oddly enough, Tata sells about twice as many pricey Jaguars and Range Rovers through its acquired JLR division.

Tata boss Ratan Tata conceded this month that mistakes had been made, and that selling the car as a “poor man’s” vehicle was wrong .


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Flopping Tata Nano Prompts Talk Of Overseas Production, Styling Changes, Diesel and Hybrid Options Wed, 03 Aug 2011 20:35:00 +0000

Tata’s Nano was launched with much fanfare in 2009, as the world’s cheapest car and a symbol of India’s automotive and economic aspirations. But first Tata had problems with its factory, which was to be built on land [allegedly] stolen from local farmers. Then, early last year, the cars started catching fire and refused to stop. Then finance was the issue, and when Tata revamped its finance, advertising and retail presence, it looked like things were beginning to improve. It turns out the bump was short-lived. After hitting 5k monthly sales last December, volume has fallen again dropping to 3,260 units in July (1/8th the volume of its main rival the Maruti Suzuki Alto) according to, which reckons

Startlingly, the most fuel efficient petrol car in the country, which is the most inexpensive too isn’t finding takers in a market troubled by high petrol prices and rising loan interest rates, that is clearly favoring cheaper and more fuel efficient cars… the market isn’t biting and the Nano sales have begun the downward spiral, this time continually.

So, what’s Tata going to fix to get its attempt at “India’s Model T” back off the ground. How about “everything”?

The crew at indiancarsbikes think they know what the Nano’s problem is:

a diesel engined Nano is the need of the day if Tata intends to reverse the Nano’s fortunes

A diesel engine is supposed to arrive by the end of this year, and could get up to 95 MPG (non-EPA)… although likely only with a CVT transmission that is also supposed to debut late this year. And sometime in 2012 a hybrid drivetrain could appear, although again, the Nano is already the most efficient car on the Indian market… it’s unlikely that more efficiency is the missing ingredient. In fact, if I had to guess, I’d say more standard equipment might be the key to improving sales.

But instead of upgrading the Nano’s equipment, a styling change could be coming, courtesy of Tata design boss (and designer of the new-look Jags) Ian Callum. Tata’s boss of Indian operations PM Telang was cagey about Tata receiving styling assistance from the Jaguar team, but  he admits

They (JLR) are part of the Tata family, so some idea exchange will always happen

So, what’s Telang’s solution? Not much.

Nano has a different clientele, people who perhaps never thought they could own a car. That’s why the decision making process is a little more complex as that’s a big step for them. It’s a very unconventional vehicle, so it’s taking some time in the market

Ultimately, it seems that, before radically altering the Nano, Tata will see if other markets take to it with more enthusiasm. Exports have begun to neighboring Sri Lanka and Nepal, and talks are under way with the Indonesian government about production for the South East Asian markets. And Telang says talks are underway with other Asian countries as well as Latin American countries about exports and eventually CKD assembly, telling the WSJ [sub]

Looking at the potential, we can think of importing the car first and later assembling it in those countries. At present we are considering many countries for assembling the Nano, but there is no timeline

Whereas the Model T caught the public’s attention nearly instantly, the Nano faces a lot more competition and very different world. Tata certainly thought that selling a cheap car in fast-growing  developing would be like printing money, but the reality turns out to be much more difficult.

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Tata Will Export The Nano, But Not Too Far Fri, 28 Jan 2011 09:56:13 +0000

Emboldened Tata has announced new plans to export their Nano. To markets such as Thailand, Sri Lanka and Bangladesh. And Tata will do that carefully. “We will go after these markets one after another,” Tata CEO Carl-Peter Forster told Bloomberg at an industry event in Bochum, Germany. Gone are bravado and hype. No more mentions to export the $3,000 car to Europe or god forbid the U.S.A.

Sales of the Nano in India have rebounded a bit, propelled by a better warranty and easier financing. In November, sales had dropped to 590 units amidst concerns about the safety of the car that had developed a propensity towards sudden combustion. Nano registrations in India rose to 5,784 units in December, still a far cry from the 9,000 unit peak reached in July.

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Is There A Doctor In The House? Tata Tries To Revive Near-Dead Nano Sales Fri, 17 Dec 2010 05:52:52 +0000

Tata is doing everything possible to revive the shriveled sales of the Nano. Sales of the ultra-lowpriced Nano recently crashed to ultralow levels: In November, only 509 units changed hands, reluctantly. The success of the much hyped diminutive conveyance more and more looks like a flash in the pan, literally. The Nano became infamous for going up on flames. Then, Tata had to raise the ultralow price a few times. On top of that, Nano buyers were seen as bad credit risks by Indian banks and were hit with ultrahigh interest rates. Stir, simmer, and you have a recipe for disaster. Now, Tata has decided to fight back. However, the counter-offensive appears less inspired compared to the enthusiasm when the car was launched.

Tata now gives a four-year, 60,000km warranty on the Nano, up from 18 months or 24,000km, The Nikkei [sub] reports. Nothing earthshaking. Suzuki offers a three-year warranty on its Alto, Hyundai does the same for the Santro.

What else can Tata do? Financing. Forget about zero percent financing. Says the Nikkei: “Loans from State Bank of India, the nation’s largest commercial bank, run for seven years at annual interest of 8-11.5 percent. Most other banks offer 8-18 percent.” Before, Nano purchasers had to pay 15-19 percent, against about 11 percent for standard car loans. Has all the signs of too little, too late.

After long trials and tribulations, Tata openend a factory in Sanand that can produce 250,000 cars annually. According to The Nikkei, “accumulated shipments to November stand at only 71,326 cars.”

Ultra-lowcost cars are seen as a transitional phenomenon as a country moves towards mass motorization. Eventually, people want a real car with room for the family. Not too expensive. But also not too small. China had skipped the microcar stage completely, mass motorization was started with roomier 3-box cars such as the Santana or the Jetta, later joined by beefier Buicks. Small cars such as the Chery QQ are a recent phenomenon and all told do not command a dominating market share.

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Tata Nano Sales Drop To Nano Levels Thu, 02 Dec 2010 16:48:57 +0000

Bloomberg reports that the world’s cheapest car, the Tata Nano has seen its sales drop from the point where it had to hold a lottery to choose buyers for its first 100k units to last month’s all-time low of only 509 units sold. Tata has raised the price twice this year, bumping the MSRP by 4 percent in July and then adding another $200 to the price in October. This, in addition to the Nano’s fire-related issues and the inability of Indian consumers to secure financing for the microcar is being blamed for the sales drop. Says Mahantesh Sabarad, an analyst with Fortune Equity Brokers (India) Ltd:

The product has had a difficult time in terms of its perception ever since those fire incidents came in. A lot of people bought the car in the initial sales period for its novelty factor and didn’t go for loans

Tata’s response: hire more sales staff and work with banks to secure loans for Nano customers. After all, the Indian automaker has 250k annual production capacity assigned to the Nano, so sales had better start picking up soon.

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Fire In The Nano! Thu, 11 Nov 2010 10:53:17 +0000

The Tata Nano was seen as the car which will set the Indian car market on fire. Unfortunately, it seems it’ll also roast its owners.

After several reports of pyromaniac Nanos, the BBC reports that Tata offers free safety upgrades for Nano customers.

But this isn’t a recall, insists the company. They say they are merely providing customer with additional safety features. (What, a fire extinguisher? A 112 decal?)

Not only is this a PR disaster, but also a financial one. The profit margin on a Nano is slim at best. So to conduct a recall free safety upgrades will be costly and probably hack away at the already anorexic profit margin.

Tata said that teams of internal and international experts concluded that the fires were “specific to the cars which had such incidents” rather than a general fault. Now that’s reassuring.

While doing their research, Tata also found serious faults. With their customers. They said that instances of “additional foreign electrical equipment having been installed or foreign material left on the exhaust system” had been discovered. “Foreign” meaning non-Nano, not Pakistani, we hope.

Tata also said that it was up to the customer whether to take the upgrades or not.

I’d be extremely interested to meet the person who bought a Nano, read this story and though “Nah! I’ll take the risk…” If they do, that’s natural selection for you.

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Tata’s Nano Goes to U.S.A. and EU. Again. Maybe Tue, 26 Oct 2010 15:50:35 +0000

Tata reiterated its threat to invest the the U.S. and Europe with their bargain-basement Nano car. At an event held today in Toyko, Tata’s Vice Chairman Ravi Kant said that “Tata Motors now plans to take it forward to the developed markets in Europe and in the U.S.,” The Nikkei [sub] reports. “Now plans?”

Tata had announced plans for Europe in 2008 (nothing happened). Mr Kant himself said in the beginning of the year that “we also recognize there is a market (for the Nano) not only in developing countries, but possibly in the developed countries.” (Sound familiar? He must have a stump speech.) Again, nothing happened. Nightmare scenarios of Tata and BYD flooding the U.S. and “blow up the distribution chain” by selling cars via “warehouse stores or electronics stores” made the rounds. Nothing happened. Dealers continue to die like dinosaurs without the help of cheap Indian or Chinese cars. Meanwhile, Tata struggled with getting the Nano produced in India, and in China, the sheen is off BYD’s halo.

Major barrier to entry: Tough regulations in Europe and the U.S. In Europe, a car must be EU certified before you can sell it. In the U.S., you self-certify, but woe is you if NHTSA buys a car at a dealer and it’s not within spec. Might as well close down.

When Kant announced the impending arrival of the Nano at U.S. shores last January, he said that “for the United States we need a car which has a larger engine and we need additional crash test modifications and we are in the process of doing it.” Today, he said in Tokyo: “The car we are going to be making for Europe meets European regulations.” Sound familiar? European tests are demanding. Guess where most applicants from low cost countries fail? In the crash with pedestrian dept.

While Western companies struggle with building low cost cars that emerging markets demand, producers of low cost cars in emerging markets struggle with their entry into overdeveloped and saturated markets.

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Move Over, Nano. Make Way For The Gleagle, The World’s Cheapest Car Tue, 25 May 2010 12:48:59 +0000

At the Beijing Auto Show, Geely had a whacko two-seater, gullwing adorned concept car on display. I didn’t deem in worthy of mention, along with the hundreds of other whacko concepts. I didn’t even snap a picture. I wish I did. If Chinese media is not mistaken, I missed taking a picture of the world’s cheapest car, cheaper than the Tata Nano.

According to China Car Times, the Geely Gleagle IG will hit the Chinese market in 2012 in China at an MSRP of $2,250. The Tata Nano is priced from $2,700 on upwards – if you can get one. Tata still has problems making the Nano en masse, a problem unheard of at Chinese companies such as Geely. A worldwide roll-out is planned for later – as a Volvo?

It is doubtful whether the entry model of the Geely Gleagle IG will sport the gullwings. Bought as parts, one of them should set you back more than the whole car. But with the wings – could it finally be the world’s first production flying car?

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Nano Develops Burning Desire Thu, 08 Apr 2010 17:56:16 +0000

Eleven Nanos were puttering down India’s National Highway 8 on their way to the dealer (don’t they have car haulers there?) when one of them burst into flames, reports India’s Deccan Chronicle. These cases of spontaneous Nano combustion seem to pile up.

Burning Nanos are a tradition in India.  Just a few weeks ago, a Nano turned into a conflagration on its way from the showroom. Again, the fire developed in the rear, where the Nano’s engine sits, and again, the driver escaped the inferno unharmed.

Last year several Nanos caught fire. Tata said faulty ignition switches were the culprit, and the supplier had been changed.  A Tata Motors spokesman said to Reuters that this time, they “are sure that it is not a design flaw. We are looking into it.”

Be it as it may, the Nano lives up to its image as a red-hot seller.

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What’s Wrong With This Picture: Speaking Of Downsizing… Edition Tue, 23 Mar 2010 21:20:29 +0000

Japan’s Mag-X [via Autoten] brings us this rendering of a Toyota low-cost car, said to be planned for a 2012 launch in India’s hot-hot entry-level car market. Expected to weigh about 1,322 lbs, Toyota’s Tata Nano-fighter is said to have an 800cc two-cylinder engine mounted out back (alá Nano).

Though Japanese car mags have a bit of a reputation for floating speculative renderings that later prove to be well off the mark, Indian Autos Blog notes that Toyota Senior Managing Director Dato Akira Okabe recently said:

We may look at launching more than one compact car model for the (Indian) domestic market. Our current market share in passenger vehicles is 3 per cent. In the next four years, we hope to sell three times our current volumes. And by 2015, our rate of growth will be in double digits

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What’s Wrong With This Picture: You Get What You Pay For Edition Mon, 22 Mar 2010 18:43:47 +0000

Pictures are supposed to be worth a thousand words, but this one is good for at least two whole life lessons. First: you get what you pay for. If you buy the world’s cheapest car, as insurance agent Satish Sawant did, it might just burst into flames on the drive home from the dealership. Second: Google Adsense has no sense of irony.

Indianautosblog notes that the Nano has already had a reputation for firestarting, and that (amazingly) a motorcyclist had to stop Mr Sawant to inform him that his car was on fire. Is the Nano’s interior so cosseting that engine-room conflagrations don’t catch the driver’s attention? Strangely this isn’t even the strangest part of the story: because Mr Sawant can’t drive, he was actually being chauffeured home in his new Nano when the thing went up in flames.

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Tata’s Busy Week Tue, 16 Mar 2010 15:21:27 +0000

Last week was an eventful one for Tata Motors. First, Daimler announced that it had completed selling off its 5.34% stake in the Indian automaker, for USD $422 million. Investors including Citibank and Tata Sons, the largest current Tata Motors stockholder, acquired the shares. Daimler explained the move by saying that it is now well enough established in India in terms of passenger and commercial vehicles, to no longer need an equity share in a local company. Daimler already builds CVs in Pune and its new CV plant in Chennai will go online in 2012. Daimler and Tata have a relationship that dates to 1954, when Tata started assembling Mercedes-Benz trucks. The two companies started local assembly of M-B cars in 1994 under the Telco joint venture.

Later, Tata Motors Group announced that global unit sales increased 59% in February 2010 over last February’s sales. TMG includes commercial vehicles made by Tata, Tata Daewoo and Hispano Carrocera, along with Tata, Jaguar and Land Rover passenger vehicles. Cumulative sales for the fiscal year were also up 17%. Commercial vehicles led the way with a 70% spurt. Total vehicles delivered were a hair shy of 90,000. All three passenger vehicle operations, Tata, Jaguar and Land Rover booked solid y-t-y increases over the bottomed out Feb. ’09 sales, 60%, 55%, and 62% respectively.

The Indian government, at a ceremony attended by Railway Minister Mamata Banerjee, inaugurated the opening of a number of rail hubs intended to serve the growing Indian auto industry. The first train to arrive at the automobile logistics center in Shalimar, Bengal was loaded with Tatas and Marutis, with Tata Nanos being the most numerous, followed by the Tata Ace micro CV. Ironically, most of those Nanos shipped to Bengal were originally going to be built there, but it was Mamata Banerjee, herself a Bengali politician, who organized displaced farmers to demonstrate against the almost completed Nano plant in Singur. Tata CEO Ratan Tata responded by moving the unit to Sanand in Gujarat state. That plant is not yet in production, so the Nanos arriving in Bengal were assembled at Tata’s Pantnagar factory in Uttarakhand.

Coming on the heels of all that good news, CRISIL, India’s leading credit rating agency, has raised Tata Motors’ short term debt rating to A+, primarily on the strength of cost reductions and new product introductions at Jaguar Land Rover. CRISIL stressed that JLR’s fortunes are critical to Tata Motors’ financial standing.

All good news must come to an end, though. Increases in commodity prices as the global economy starts to recover, along with more expensive tires and taxes, will mean that the world’s cheapest car, the Nano, will not be able to hold the 100,000 rupee mark much longer. In the past year, steel has gone up 25%, and increased demand for other metals like copper and aluminum as well as petroleum based plastics has driven costs up on virtually everything that goes into making a car. So far 26,000 Nanos have been delivered, and Tata says that it will guarantee the original $2,200 price for the first 100,000 customers.

How many buyers will opt for the stripper Nano is unclear, since right now the almost twice as expensive (172,360 – 185,375 rupees) Nano LX is selling better than the base Nano. When Tata starts taking more orders in Q4 2010, expect to see the LX go up to 200,000 rupees (USD $4,400) and the base car to be priced @ 130,000 Rs.

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Hyundai Says Tata To Second Place In India Fri, 12 Feb 2010 20:19:09 +0000

Hyundai are on fire at the moment. They’re posting good profits at a time of economic instability, their quality & reliability is winning them awards and customers like what they see in their showrooms.  However, that magic formula seems to be losing its lustre elsewhere in the world. The Hindu Business Line reports that Tata Motors have snatched number 2 position from Hyundai in the Indian market. Sucks to be third!

Tata’s snatching the silver was due to the growth of new models and refreshes of its existing. Tata sold 11,448 Indicas, which benefited from a new “Vista” range, a newly launched Indigo Manza, which sold 7,258 units and the good old/new Tata Nano, which sold 4,001 units. “The Indica sales were the highest this fiscal year, of which the Indigo’s share were in fact the highest since launch in 2000. The Nano volumes also helped. Full-scale commercial production for the Nano will start from April at the Sanand plant,” said a Tata company official. All in all, Tata sold 31,081 units in January 2010, which represents a 48% growth from January 2009. Hyundai sold only 29,601 units in the same period. However, Tata still have a long fight on their hands, if they want to go for the gold and supplant Maruti Suzuki as number one car maker in India.

For the same period, Maruti Suzuki sold a whopping 81,087 units, almost treble of Tata. As the sales figures show (to anyone with a brain in their head) India loves cheap, small cars. And if it’s one thing which Hyundai do well at, it’s cheap, small cars. So why are they being overtaken in the second most populous country in the world? Does this shift represent fundamental superiority on Tata’s part, even before Nano production goes in high gear?

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Ask The Best And Brightest: What Price Tata Nano? Sat, 16 Jan 2010 22:07:16 +0000 Doors sold separately

The AP (Yahoo) reports:

Tata Motors already has made a European version of the four-seat car that will cost about $8,000 when it debuts in 2011, and a Tata Technologies official said privately that the U.S. version is expected to have a comparable price. The official did not want to be identified because the price has not been made public.

A one liter, three cylinder engine making a reported 60 hp. Five speed manual transmission. Two airbags, ABS, traction control, and electric power steering. 14 inch wheels. [via Autocar] Would you bite for $8k? Everything sells at the right price. Where is the Nano’s magic number?

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Honda Exec: Chinese and Indian Automakers Could “Blow Up The Distribution Chain” Wed, 13 Jan 2010 22:44:35 +0000 Can you deliver a six pack? (courtesy: The Washington Post)

The prospect of US launches by Chinese and Indian auto brands like Tata and BYD have at least one of the established US-market players in a paranoid froth. Honda VP John Mendel revealed a few of the nightmare scenarios that keep him up at night to USA Today [UPDATE: more on Mendel's fears at Automotive News [sub]]. One, inspired by BYD’s plans for a 2010 US launch without a distribution channel in place, is that newcomers could skip the dealer model altogether. Mendel worries that “warehouse stores or electronics stores” (sound familiar?) could be used to cut dealers out of the loop, “blowing up” business-as-usual for US distribution strategy.

Mendel’s fear clearly owes something to the post-9/11 paranoia of asymmetrical warfare: a new enemy, exploiting its smaller size to wreak havoc on an already-fragile system. Happily for America and its fine car dealers, fears of such asymmetry are typically overplayed. An industry that lives and dies on volume isn’t likely to be dominated by a firm that rejects a large-scale, dedicated distribution network. A BYD could theoretically get a toehold by selling its EVs through some other retail chain, but there’s nothing in the history of the car game to suggest BYD could really become a Toyota-challenging global player (as it aims to) without securing a US dealer network.

Mendel’s second mania is based on a equally shrewd insight into the American psyche, specifically our love for all things disposable. Like his direct-marketing theory though, it takes the insight a little too far. The prospect of a US-market version of a Tata Nano has Mendel worried that Americans could become accustomed to the concept of a “disposable automobile,” to the detriment of established players like Honda. He quails:

If you’ve just spent a few thousand dollars on a car, and it needs repairs, maybe you won’t fix it. Maybe you’ll decide you want a new one in a different color, and just get another one.

Maybe. Or, maybe you’ll decide you’re tired of driving a Kei car and buy something that can go faster than 70 MPH. Besides, a US-market Nano would still cost well over $5,000, which is probably enough to discourage too much disposable car mania.

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The $220,000 Nano Thu, 07 Jan 2010 14:59:08 +0000 Before the conversion. Picture courtesy

The world’s supposedly cheapest car ($2,500 apiece) will cost $220,000 when Mumbai-based D.C. Design is through with it. They will keep the car’s snub-nosed shape, everything else has to go.

The standard two-cylinder 624cc, 33-horsepower engine will be replaced by a 1600cc engine. To make room for the motor, the back seats will be removed. The car will get new brakes, new suspension, and bigger 20-inch wheels to allow for the top speed of 200 kilometers per hour (124 mph).

D.C. Design will accommodate customer desires for colors and trims, the technology cannot be modified. “There will be a lot of tech wizardry in it, plenty of IT-enabled equipment,” said Dilip Chhabaria, head of D.C. Design, to AFP (via Google.)

D.C. Design plans to build two to five of the world’s most expensive Nanos per year. Their target market is wealthy Indians “who have a passion for cars” (and a wanton disregard of cost.)

A prototype is expected in two months.

In related news, the export model of the regular Nano could be headed to the U.S. in three years, said Ratan Tata, chairman of Indian automaker Tata Motors, to the Freep. That’s a year later than originally planned, but Tata will have its hands full: “For the United States we need a car which has a larger engine and we need additional crash-test modifications and we are in the process of doing it,” Ratan Tata said.

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India Auto Expo: The Nano Warriors Assemble Tue, 05 Jan 2010 22:41:52 +0000 Honda's New Small Concept

Honda, Toyota, Ford, Chevy, Tata, Renault and Volkswagen are all gunning for India’s small car market, with a number of new models unveiled or featured at today’s India Auto Expo. Some, like the Renault ULC, or “Ultra Low Cost” car still haven’t been revealed. For a look at some of the competitors that are on the road or have just been unveiled, check out our gallery below. With Toyota and Volkswagen publicly aiming for ten percent market share (and others surely hoping for a similar performance), the competition couldn’t be more cutthroat.

Chevrolet Beat (Daewoo Matiz Creative) Ford's Fiesta-based Figo Honda's New Small Concept Maruti Suzuki Alto Suzuki's R3, and entry-MPV The Maruti 800 The Tata Nano with Ratan Tata Toyota's Etios Volkswagen's Polo Zemanta Related Posts Thumbnail ]]> 5
Quote Of The Day: Coming To America Edition Tue, 05 Jan 2010 17:50:41 +0000

We also recognize there is a market (for the Nano) not only in developing countries, but possibly in the developed countries. For the United States we need a car which has a larger engine and we need additional crash test modifications and we are in the process of doing it.

Ratan Tata at today’s India Auto Expo [via Automotive News [sub]], suggesting that the world’s cheapest car could eventually be sold in the US. Fiat is already partnering with Tata to jointly sell the Nano in Latin American markets, so there’s a chance that the Indian city car could eventually show up at Chrysler dealerships.

Speaking of possible US-bound developing-market-mobiles, an Automotive News [sub] reporter spoke to several Volvo dealers asking whether they’d consider selling Chinese vehicles once Ford sells the Swedish brand to Geely. The response was understandably less than effusive:

Until this deal goes down, I’m not even thinking about selling a Geely car. With these deals — look at what happened with Saab — it’s all pure speculation until it happens.

After all, Volvo has been sold on its Swedish premiumness for so long, few dealers would be enthused to overly associate their dealerships with Chinese brands (like lead©, melamine® and slave labor™). India, on the other hand, doesn’t have the knee-jerk negative connotations in this country that Chinese goods do. For now. The launch of the Mahindra brand (if it ever happens) will be crucial in paving the way for acceptance of Indian brand names in the US, but the Chinese don’t yet have a clear vanguard brand. Given its rolling punchlines like the GE, Geely would make a poor first Chinese brand in America.

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Winterkorn: No 13th Brand For VW Sat, 19 Dec 2009 18:05:08 +0000 Winterkorn, sending the wrong signals. Picture courtesy

VW CEO  Martin Winterkorn is a superstitious man. He doesn’t want to add a 13th brand to his (or rather Piech’s) large collection. (Coincidentally, 12 is the number of Piech’s children. More or less. Nobody is quite sure,) “There are some who knock on our door. Some really want to come under our roof as they see we’re on a good path strategically. But we are satisfied with the current line-up,” Winterkorn said to Wirtschaftswoche.  Specifically questioned about Volvo or (gasp) Daimler, Winterkorn answered: „There are many who would like to snuggle in VW’s cozy bed. Thank you, not interested.”  Instead, he’s re-thinking the line-up of his new acquisitions:  “I could imagine a smaller Cayenne derivative. Or a Porsche below the Boxster. This is under discussion.”

As far as synergies with Suzuki go, Winterkorn sees the usual savings when buying parts. (Suppliers, beware the feared Volkswagen-Einkauf.) He can also imagine Kei cars “on the roads of Paris, London, or Bangkok.” What he doesn’t see at all is the rumored Nano-swatter, built by VW & Suzuki: “A Nano is taboo for us. We will never stoop down to a level of a Nano. We have certain standards, for instance when it comes to safety. Suzuki won’t do that either.” Never say never: A low-priced entry model for emerging markets is thinkable for Winterkorn.

Suzuki dealers could also sell VWs. But strictly within the boundaries of racial separation, called Markentrennung at VW: “They have to do that in separate showrooms.”

Winterkorn is looking forward to 2010. He sees a higher market share for VW, especially in the B(R)IC countries. He’s up on the electrification of the car, someday. He’s decidedly down on hydrogen. Reminded that Daimler wants to sell a hydrogen car at the price of a common hybrid by 2015, Winterkorn sneered: “They also had announced production-ready hydrogen cars for 2004.” He doesn’t believe that hydrogen can be made in an environment-friendly way, and he can’t imagine a hydrogen gas station at every corner.

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Yet Another NanoSwatter. By GM And SAIC Mon, 14 Dec 2009 14:35:13 +0000 Think smaller & cheaper. Much  smaller & cheaper. Picture courtesy

Let’s get small: The new 50:50 joint venture between China’s SAIC and GM may plan to launch an entry-level low-cost car for the Indian market, say’s India’s Wheels Unplugged.

The mini made by monsters would cost between $3,500-4,000, and could also be unleashed upon Latin America, Eastern Europe, Africa and even possibly back to China.

India is the world’s second fastest-growing auto market, and is dominated by small, affordable cars. SAIC and GM will use GM’s two local manufacturing facilities (at Talegaon near Pune and Halol near Baroda) and a power-train facility, and GM India’s nationwide distribution network.

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India’s Nano Wars Thu, 12 Nov 2009 16:33:08 +0000 Everyone has the Nano in its sights (courtesy:

With Tata unable to produce enough Nanos to keep up with demand, more automakers are gunning for its entry-level segment. Renault-Nissan is teaming up with its Indian-market partner Bajaj to produce a car that’s even cheaper to produce than the Nano. “I can tell you the cost of this car would be lower than any car today made in India,” Renault-Nissan CEO Carlos Ghosn tells Gasgoo, adding that a lower production cost wouldn’t guarantee that the new car would be priced lower than Nano. The Renault ULC, as the low-cost car is being called during development, will be available in India in 2012, by which time GM and Toyota could have competing models on the market. Ford’s recently-announced Indian market low-cost car, based on the discontinued previous-generation European Fiesta, will be positioned above the Nano. And that strategy also appeals to Honda. The Motor Company tells the WSJ that rather than competing directly with the lowest-cost segment, a sub-Fit (Jazz, as it’s known globally) hatchback will be introduced around 2012 to compete with Ford’s model. The Jazz/Fit currently sells for about $15,000 in India, leaving a huge window between there and the Nano’s approximately $3,000 price price tag.

For automakers scrambling to break into India’s auto market there seems to be two separate strategies: the major global players are gunning for the lowest-cost segment, while the second-tier players are shooting just above it. The exception to this rule is Volkswagen, which was the first to the Chinese market and has become the number one player there. And unless a rumored tie-up between VW and Suzuki takes place (Maruti Suzuki is by far the biggest automaker in India), it will have almost no presence in India. Meanwhile, GM’s presence seems set to be eclipsed by its Chinese partner, SAIC. Hindu Businessline reports that SAIC will likely pick up 50 percent of GM’s India operations in hopes of developing a greater export market for Chinese-produced vehicles, and lowering the cost of GM’s Indian-market offerings. The light truck and low-cost car segments are seen as Chinese firms’ greatest strengths vis-a-vis its Indian competitors, but with the globals flooding in to India in hopes of gaining a foothold in one of the last huge growth-potential markets, India’s car wars won’t be a gimme for anyone.

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Kirkland Signature Nano? Wed, 11 Nov 2009 17:34:31 +0000 Make that the Mattel Nano...

The Economic Times of India reports that Tata is considering offering knock-down kits of its Nano microcar and allowing franchisees to offer the world’s cheapest car as a private-label brand. The move is being considered as Tata’s dedicated Nano plant is still ramping up to its 350k unit annual production level, and the company is still having a hard time filling demand. Can’t you just see twelve-packs of Nanos at Costco?

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Want To Start Your Own Little Car Factory? Tue, 03 Nov 2009 01:53:34 +0000 You could have mine in any color, as long as it’s shocking pink. Picture courtesy

I’m thinking about opening a car factory. A really small one. Tata would sell me their Nano in kit form. I’d have it assembled (using cheap Chinese labor, of course) and sell it as the Bertel car. Entirely possible. Tata may allow small car assemblers to put together its Nano and sell it under their own brand, India’s Business Standard reports via Reuters.

Tata began selling the Nano, supposedly the world’s cheapest car, this July, but so far it hasn’t been flying off the shelves, so to speak. Only 3000 were sold this October. Supposedly, it is production delays that are holding things up. Some of the cars went up in flames.

Tata is building a factory for the Nano that has an annual capacity of 250,000 units. It is expected to be ready by the end of March. Until then, it is making the Nano in smaller numbers at an existing plant.

Vice Chairman Ravi Kant said that Tata Motors might allow assemblers to set up micro-assembly sites. They can give it their own pet name. “We call it Nano, they don’t have to,” said Kant.

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