The $850 figure was at the start of Model T production when they were at their most expensive and produced in relatively small volume (although still cheap compared to other cars of the day) – By the 1920’s the T’s purchase price had fallen to $300, or around $3,400 in 2006 dollars.

[source Wikipedia]

The automotive division of Tata is turning out to be a pretty amazing entity. Then again. It also has the financial benefit of it’s sister companies and I’m sure the governments (India is riddled with them) are working with Tata in a way similar to how the squeak wheels of American government got much of the Detroit grease in days of yore.

Perhaps five to ten years from now we may see a Tata with electric power. Perhaps it will be sooner. I sense even Toyota will be very interested in a lot of the innovations that will come from the development and assembly of the Nano.

Looks like the Indians are making a name for themselves even before they enter the North American market. Good deal!

Like many commenters, I’d love to have a Tata-like vehicle in the US. Or have the opportunity to buy something like the old Falcon pickup or original Datsun truck. But regulatory barriers (safety, emission, and others) force vehicles to be more complicated and expensive. If the Nano can meet US standards, it really will be a breakthrough.

1. the 2500$ asking price is the absolute bare-bone minimum. Extras and upgrades will cost. Therefore, most people will pay a larger sum. It’s all about PR.

2. Mr Tata is in it for the long run. He basically subsidises the car for the indian market, while the westerners will pay more. He can overcharge the car two to three times in Europe, and still have the cheapest car for sale.

3. According to the Budd-System building principle, maximum output per factory is limited to 250 000 cars. Tata will build those cars on 100% output. It is a huge difference according to the principle between, say 70% and 100% output, as building costs are basically the same. Most car manufacturers are dependent on what the market can take, and if the market stipulates a lesser share than maximum output, they will take heavy losses. That’s why manufacturers over-produce, and sell the extra capacity at heavy discounts, e.g. fleet sales and fire sales. As the potential market for the Tata is up in the millions, Tata will sell every car they make. And fast.

4. it speaks of great hypocrisy when westerners talk about “what about oil?” and “What about pollution?” Gas-guzzling SUV:s is a far greater problem for the global environment than getting a couple of million indians a set of wheels.

5. 2500$ new bad car, or 2500$ used good car? Well, in India there is a market for used cars at that price, the problem is that there isn’t any to buy. In the US, there is more or less a car for every holder of a driving license. According to the US Bureau of Transit Statistics for 2004 there are 243,023,485 registered passenger vehicles in the US. That’s a lot of cars. A whole lot. It goes without saying that India does not have that kind of used car market available.

The situation is not unlike that in Europe after WWII, when the market was screaming for cars and there was nothing to buy, because most used cars was simply used up, and most new cars were exported to create hard cash in trade balance.

Therefore the Tata is an excellent solution for the indian market. And perhaps it will be for the rest of the world as well. If the technology allows it, someone will do. And it seems that Mr Tata saw a window of opportunity he simply could not resist.

Now if only the trucks from the prior wave don’t monster truck bulldoze them all down.

Fourty years ago nobody would have imagined that smoking a cigarette would be considered a social taboo and/or illegal in so many settings in the USA. Ten years from now it may well be the same for commuting to work in a Suburban or F150.

Even if it could do this (downhill) the incredibly small wheels would be doing many, many RPMs and the incredibly cheap wheel bearings would overheat/fry by the time you get to the bottom of the hill. One 75 MPH downhill run could cost you 25% (or more) of the entire lifespan of your incredibly cheap wheel bearings.

If you want to go back to a steel IP go right ahead, but don’t complain when the cup holder rusts when you spill your coffee/coke/water.
Oh yeah the 1957 Belair did not have a cup holder

Why not; with its rear engine, it would have great traction, just like the VW Beetle. Perfect for snowy parking lot hooning.

I wish there was a bare bones affordable truck also. With a nice diesel 4 or 5 cylinder and a 5 speed. I would buy a dependable one in a second if it existed in the current market of gargantuan trucks.

Hey, you may be right (…but it just may be a lunatic you’re looking for…). I’ll be the first to admit the crux of my argument relies on a pretty big “IF”. That said, if Chevrolet produced a 1957 Bel-Air today, with the same materials it used in 1957, how much do you think it would cost? I’m pretty sure the rice in prices of steel since 1957 are the reason why your dashboard is made of plastic now. In other words, it’s happened before that rising prices in raw materials have failed to prevent a decline in the price of technology. People just got innovative. Why should that stop now?

My point is this: if the Nano were sold here, at close to this price point, it would be disposed relatively sooner, given repair costs. But I’m not sure that folks are willing to accept the trade-offs (I might). On the other hand, in India and other developing markets, this won’t be seen as a “disposable” car, for the reasons elaborated in the comments above (cheap labor to repair it).

You might be right about an eventual $1k car, but I’m a bit more doubtful. High tech items have very little actual material cost; the costs to build are in the technology itself. But cars have quite a bit of raw materials (steel, aluminum, plastic, rubber, etc.) that all have become more expensive lately, and have a lot of embedded energy in them (to extract and produce them). I don’t readily see a scenario where these materials can become cheap enough to allow a $1k car. If anything, they’re getting even more expensive.

I buy appliances for my rentals. The prices for them bottomed out about 5-10 years ago, and are starting to be more expensive (inflation adjusted) due to higher steel and energy costs. The same might be true for the Nano. It might just be an all-time low.

Chopper man is on track. Many others too. It is maybe a paradigm shift like model T, VW type 1, austin 7, deux chevaux. Good for them.

I have read cuban mechanics cutting chevy piston rings out of cast iron plumbing pipes, by hand for their bel airs. Rebuilding spark plugs. Seen photos of small one man shop furnaces where Indian bike folks make new replacement 2 stroke cylinder castings for 1970 Japanese designs still running around and considered hi performance. They build brand new antique vehicles, with antique licenses -royal enfield bullet. Yes talented third world does what 1st world cant even imagine for no money. This happens in corporate offices too there. Not low end tinkering, I mean they surpass what we are used to. Read how their top people interview on the site below. Compares favorably with what I am used to for US mgt.

They will bid against us for the raw materials and fuels. Their currency is in ascent, ours in decline phase. They are ramping up fast and our companies are building there and closing here. Do the math. Get a job in health care or a pensioned one in government…

If TATA which is not a quirky small shop, went insane and decided to acquire Ford, GM and Chrysler for some reason, they could do it. Look at their market cap. Well, their market cap would tank on news they were crazy to buy big 2.8 so maybe not.

http://www.tata.com/0_about_us/index.htm

Finally I go on record that I will gladly pay $10k for a brand new 2cv if it had galvanized body and were street legal in USA. Drive wide open all the time. Try that in a C6.

My only quibble with what I see on the Nano is the tires look pretty small for bad road surfaces including dirt, mud and muddy puddles. I expected 13″ or 14″ skinny, looks like 8 or 10″.

I sometimes wonder if hot roddin’ and the advent of the muscle car wasn’t a bad thing for the American car industry. It seems that the race for more and more hp has dominated car manufacturing and advertissing in this country for as long as I can remember, and maybe that’s where it started, money being plowed into development of hp instead of comfort, safety, and efficiency.

and nice reference! glad you were..intrigued.

The 90s Nilsson Hardbody is exactly the sort of thing I was thinking of. Creatively designed and assembled in order to drive down costs.

I’d like to subscribe to your newsletter.

I have a friend at work with an early 90’s Nissan Hardbody single cab. Style your new bare bones truck along those lines and you’d have a hit.

When a car costs $1,000, which may admittedly not happen in our lifetime (or it might… DVD players costing $2,000 now cost $79,99 at Wal-Mart), tell me it won’t be disposable. The constraint for replacement intervals will not be reliability, it will be price. No one keeps mature technologies to the end of useful life today (except maybe Paul Niedermeyer!) – not TV’s, not DVD players (upgrade to Blu-Ray plz…), not cameras and already not cars.