Tata Nano: $2500 Car For Developing Countries

By Andrew Meyer on January 10, 2008

tata nano.jpg

I usually don't post this frequently but I can't help myself since so many new products are popping up in the news aimed at the lower brackets of the socio-economic spectrum.

This is definitely a space that I'm interested in and as you can see in the left sidebar BUZZYEAH has a whole Socio-Economic category devoted to news like this.

Yesterday I posted on Pixel Qi's plans to join the low-cost laptop and mobile phone space.

And, today we have Tata's long awaited $2500 car being unveiled at India's biggest car show in Delhi. Both the NYT and BBC have excellent coverage.

Tata's Nano is unofficially known as the "People's Car" and it easily is the world's cheapest car. They are targeting the car at very low income families providing them an option over their usual choice of feet, bike or scooter.

Now, I know bottom of the pyramid crowd who make under $2 a day won't be able to afford this car but its great to see such a large car manufacturer target the "developing nation" market in such a innovative way.

Here are some quick specs on the Nano: 33bhp, 624cc, engine at the rear, no air conditioning, no electric windows and no power steering.

Supposedly, Tata engineers questioned each component of a conventional four-wheeled car to see what was ACTUALLY needed to drive down a road.

They even tested things like using three brakes instead of the normal four.

I really love that kind of thinking.

Tata has been talking about building this car for years. When I was in India two summers ago I heard plenty of buzz about this car. Its great to see it in the flesh.

I remember seeing plenty of four- or five-member families riding around the hectic streets of Bangalore on small scooters and thinking it was completely nuts. Mother's would be holding babies on their laps and having the larger kids hanging off both the front and back of the scooter.

It was seriously nuts!

Most of my co-workers at the microfinance institution I worked at explained that it was perfectly normal behavior for families to ride around on scooters together.

It was hard for my mind to wrap around given the safety standards and concerns we have here in the States.

Well, according to Mr. Tata at the Nano unveiling ceremony he built the car with scooter-riding families in mind:

"I observed families riding on two-wheelers - the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby.

It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family."

I'm glad to see more and more products and services targeted towards the lower socio-economic brackets. They are definitely viable and I look forward to highlighting more products and services like this in the future.

If you know of something cool in this space give me a holler at andrew@buzzyeah.com.

Update: One of my good friends Mike Murtaugh has his first job in Delhi this year doing photo/design/etc work. I messaged him to leave a comment below about families riding around on scooters and whatever he wants to say. Definitely check out his excellent photography over on his Flickr.

Update: See Mike's comment below. He brings up some excellent points. It's lengthy so I gave the comment its own post.

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Viewing 6 Comments

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    Great post Andrew, thanks for the shout out as well. I am currently living and working in Delhi and due to the nature of my job I am getting to see a good portion of India. I'll do my best to fill people in with India's take on the Nano. These days their is a general sense of optimism among Indians. In the media its a bit to overstated but none the less India's is becoming a major global player and not just financially. In some ways the Nano is one of the spoils India is reaping due to the upsurge in growth. The growth in the market certainly has its winners and losers. Largely the winners are the expanding middle class. The losers are the lower class/casts.
    So who will be buying new nanos? Largely it will be this middle class. As many of you know the retail price is about one "lahk" (2,500.00 USD). No car before in India has been sold at such a low price (the actual cost after taxes and registration will fall around 3,000-3,500). Part of the reason Tata can go so low is that Tata is one of the major steel manufacturers in India. A friend at work tells me that 80,000 have already been sold in advanced. In the future they project about one million units per year. Another friend at work said he is already going to buy two. As the tata founder stated he became inspired when he saw full families riding a motorbike. This is true. Walk around any city in India and you will most likely see this. It is not a new phenomenon and will certainly continue into the future. On a purely safety level the nano is going to put families into cars instead of on a bike. This will save lives so certainly a plus. The nano does have some minuses as well at least as I see it.
    Driving in India is no joke. It takes special talent to survive any city. My own scooter record can attest to this fact. In less then a month I got into one minor accident, closely avoided another, and always say my prayers before going out. And I live in what could be considered a suburb of Delhi. As my friend told me the nano is geared for only "city driving". The reason for this is most roads in India lack maintenance. When you travel outside of cities you can go a bit faster. This is nice but the quality of roads are at best sporadic. You can be going for 10 miles or so and get to the top of a hill or go around a bend and suddenly be on a dirt road or rock road. Not much warning at all. From pictures I've seen the nano looks like only the bare minimums to drive. Small tires and I'm guessing minimal shocks. Another road obstacle is the cow, goat, and the ever present dog. In every city I have been to cows will be roaming from the fields to the highways. Many times we have had to swerve suddenly to avoid hitting a cow. In any car you wouldn't want to hit a cow and in India this goes double. Cows are considered "holy" and if you hit one you may be better off fleeing. A mob could easily form. What makes avoiding cows hard for the nano is its lack of power steering. You don't need power steering to drive a car and tata saved significantly for scrapping this but give me the option in India I'll opt for the power. So getting back to the city. Many times I've been in some massive traffic jams in Delhi trying to make a flight. In many places the roads are narrow and what should be a two lane suddenly becomes a 5-6 lane street. In India you have large trucks, smaller SUV's, cars, scooters, bicycles, and "rickshaws". A rickshaw is basically the size of a golf cart. Often the only thing moving in this mess is the motorbike. Lets fast forward to 2009. With a million more nanos on the road what will this mean for cities? I'm told Delhi is the fourth largest city in India. In the biggest cites I think this will be a problem. Where Delhi will have an advantage is that it is building a massive metro connecting all major parts of the city. I've ridden it once and must say it compares with any I've been on. Lastly what will more cars mean for the environment? Most times I go out jogging around my block my lungs burn. To put it lightly Delhi has a lot of smog and dirt flying around. The nano has a relatively small motor and low emissions but add say 1/5 of the million to a city like Delhi and you may have a bit more to choke on (each year add another million).
    Am I being to hard on the nano? Maybe. It certainly does have its pluses. And who should decide what Indian's should spend their money on other then themselves. When you get an automobile in India its a big deal. My friend said a party is standard not to mention the envy of all your neighbors. Is the nano the car that will define the future of India? This next year should be telling. I'll keep you posted.
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    thanks, Mike. excellent points.
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    I am also interested in how the new tata will effect Inida. I recently returned from a month in south Inida -- Tamilnadu and Kerala -- and experienced the chaos of the traffic.

    I don't know how the current roads will keep up with so many additional cars hitting the streets. Also parking and pollution will be an issue. It will be interesting to see how this plays out. I believe after this car hits the streets many changes will have to happen. Currently traffic moved along pretty well and traffic jams were not too common ... mainly in Cochin. But if more traffic jams happen, the harmony in driving will no long be there and I believe more traffic lights, rules and new roads, bridges, etc. will be needed. And it seems the government is slow to move so I think it won't happen right away and will slowly begin to change as drivers raise a fuss. By the time I return to visit, it will be a very different country b/c part of the charm was driving and the winding roads that seemed to just pop up -- there seemed to be no planning on how roads were developed and in the future a plan will need to be there. I look forward to keeping an eye on how India grows.
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    Ashley, that is cool that you were in India for a month. I really want to go back.

    You are right about the infrastructure in India. It has a long ways to go. I actually traveled by car from Chennai to Thiruvananthapuram (down at the southern tip of Kerala). That was one beautiful and also crazy ride.
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    I would like more inforemation on purchasing one of these cars.
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    Joey, I think the Tata Nanos are only sold in India.

    You can find more info on the Tata Nano site: http://tatanano.com.

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