The Indian Auto Industry is creating waves with its Cheap cars !

I am sure by now everyone knows about the the Rupees 100,000 ($2,500) car that Tata motors is planning to come out by next year. Infact, when Tata made its vow to build a $2,500 car, many Western auto executives ridiculed the project, dubbing it a four-wheel bicycle. They aren’t laughing anymore. Tata’s model is a real car with four doors, a 33-horsepower engine, and a top speed of around 80 mph. The automaker claims it will even pass a crash test. And while the car probably won’t win any beauty contests, it’s no ugly duckling either, according to the handful of industry insiders who have been given a glimpse. The rest is top secret, but Tata engineers are already testing a prototype as the clock ticks toward a late 2008 launch.

Renault-Nissan is the other automaker which has taken up the challenge and plans to launch a $2,500 car next year. Both are leading a race to the bottom that could affect the business every bit as much as Henry Ford’s Model T did a century ago..

After years of making their mass-market cars more expensive, the world’s automakers have abruptly shifted into reverse. With stagnant growth in the U.S., Europe, and Japan, they are now eyeing emerging markets for new opportunities. That means redesigning the car for buyers who might otherwise be able to afford only a motorcycle. And outdated, stripped-down models won’t do. Demand is surging for basic cars that combine modern comfort with safety at a fraction of today’s cost. The key is India’s low-cost engineers and their prodigious ability to trim needless spending to the hilt, a skill developed by years of selling to the bottom of the pyramid.

Whatever the reason, I am excited about the prospects of cheap car – Now only if someone could invent how water could be used as fuels in these cars :)

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Author: Arun Prabhudesai

Arun Prabhudesai is founder / chief editor at trak.in. He jumped the Entrepreneurship bandwagon in early 2008 after a long 13 year stint in I.T Industry. You can follow him on twitter @trakin or get in touch with him at admin-at-trak-dot-in or 91.9822575676.

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Tagged as: automakers, cars, fuel efficient Indian small cars making waves | 1 lac c, Indian Automotive Industry | Cheap, renault_nissan, Tata motors, tata_motors