Tata News

Indian company Tata has unveiled plans to build a people's car that will cost $2800 while carmakers Renault and Nissan are seriously looking at a vehicle around $3500.Renault already has the mass-production Logan car, which sells below $10,000 in Europe.Meanwhile, analysts say Toyota, Hyundai and Chinese automaker Chery are also looking to make ultra-cheap cars in India.However, Tata has been criticised by green advocates who say its car would simply add to traffic chaos and carbon emission, a claim Tata chairman Ratan Tata vehemently refutes.He says his company will bring what is billed as “the people's car” to market next year and its price will be on target, despite a sharp rise in the price of steel and other inputs since the project announcement three years ago. Details or pictures of the car have not yet been released.Carmakers from around the world are keenly watching progress in the Tata project, which analysts say could set new price benchmarks and force other manufacturers to follow suit.But environment groups say the low price will bring the car within the reach of millions of Indians, triggering more pollution and burdening the country's crumbling infrastructure.However, Tata says his car will adhere to strict quality norms like any car in the developed world. He adds: “We will have less pollution per vehicle than any other vehicle in the country today”, indicating that pollution levels will be close to that of two-wheelers.He acknowledges there will be more congestion, but says the answer is in building more and better infrastructure rather than asking car makers to roll back production.Meanwhile, David Cole, chairman of the US Centre for Automotive Research, says a small car with a small engine is likely to pollute less than one with a large engine.But a clean car in India likely would not meet US Environmental Protection Agency pollution limits, he says.“Most of the developing countries, their emissions standards are just sort of getting cranked up now. The baseline is not very difficult to surpass,” he says.Tata says he is curious as to why his low-cost car catering to the aspirations of average Indians is being singled out for criticism.Earlier, there was scepticism that the company could stick to the price target and now it is facing “flak for a different set of reasons”, he says.The company plans to make between 250,000 and 500,000 units a year, Tata says. The base model will cost 100,000 rupees ($3000), but there will be two more variants at a higher price with added features.Keeping fuel options flexible, including the use of ethanol, is also being considered, he says.The project has spurred other global carmakers to explore similar ventures. Already, Renault and its partner, Nissan, are trying to determine if they can sell a compact car for around $3500.VW, meanwhile, unveiled its Up! concept at the Frankfurt motor show this year, a van-like Space up! concept at the Tokyo Motor Show and a Blue up! concept at this month's Los Angeles motor show.The up! concepts are aimed at reviving the low-priced people's car philosophy of the original VW Beetle.VW says development of production versions are underway.It is expecting to have up!s on the road within the next three years.German auto consulting firm CSM Worldwide says the new Tata could help Tata Motors emerge as India's largest manufacturer of cars and light trucks by the year 2013.

Carmakers from emerging market countries have revealed their intentions at the Frankfurt Motor Show, even though their presence had been discreet compared with the European, Japanese and US giants.As car sales stagnate in those three regions, manufacturers have turned towards China, India and Russia, all of which had exhibitors present at the fair. China sent the biggest delegation, with 44 stands that included carmakers as well as parts companies.Two years ago the Chinese had a timid presence at the show but that changed this year. For most Chinese auto companies, however, coming to the shows was “a question of getting a foot into the European and US market,” says Hartwig Hirtz, who imports cars to Germany for Brilliance, a major Chinese brand. He sold his first models this year and awaits European certification to attack 17 other markets in 2008, with an annual sales target of 15,000 units.But getting started was not easy. In addition to charges of copyright violations, some Chinese cars have had catastrophic results in crash tests. “The Chinese might not have taken European security obligations seriously enough,” Hirtz says.For Elisabeth Young, president of Asie Auto which imports Brilliance in France, the short-term Chinese target is to show they can do as well as the Europeans. “It's important as well for the domestic market, which is very competitive, and where clients still favour European and American brands,” she says. “Within 10 years, they want to be among the world's biggest.”India, meanwhile was much more discreet, with no cars and just a few stands squeezed in next to Czech exhibitions, displaying the green, white and orange national flag.India has nonetheless been making noises. Tata Motors is mulling a bid for the British luxury brands Jaguar and Land Rover, which might be sold by Ford. Another Indian group, Mahindra, has also been suggested as a possible bidder for the British companies.As for the Russians, Lada remained their only brand on display, and included the Niva four-wheel-drive vehicle.Lada first appeared in Frankfurt in 1970 and is reasonably well implanted in Europe, where it sold 25,000 cars last year. “We have a traditional clientele,” a spokesman says. “It's a niche market.” It mainly attracts those who have less to spend, but is a market in which Renault has nonetheless achieved considerable success with its Romanian-built Logan. “On this point, we are unbeatable,” says Benoit Chambon, spokesman for AZ-Motors which will import Shuanghuan cars to France.