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India released the world's cheapest car, the Nano, on January 10, 2008, at a car show in New Delhi.

The sticker price of $2500 is quite a steal by American and even Indian standards as far as new cars go, but many Indians, who are accustomed to riding motor scooters, may find it difficult to cough up the difference in price between the Nano and the two-wheel motorbike they currently use for transportation. The most popular scooters in India run just under $1000, so even a $2500 car would be quite a leap in price. Additionally, cars are more expensive to maintain than the two-wheelers owned by most Indian families.

From an American perspective, it is hard to imagine the "family car" being a two-wheeler, but it is quite common for a family of four in India to get along quite nicely on a motorbike. In fact, motorbikes are definitely the vehicle of choice in India; eight million motorbikes were sold in India last year, compared with one million cars.

Although Indian families may be accustomed to getting around on a scooter, safety concerns do abound, with this being the mode of transportation for the masses. In fact, safety considerations were a driving force in Ratan Tata's plan to develop an inexpensive car suitable for the average Indian family. The Tata conglomerate (which started with tea products and eventually turned to steel) is known for values that stem from philanthropy, as well as a tendency to be paternalistic.

Ratan Tata, the Cornell trained designer of the car is quoted as saying, "I hope to make a contribution to making life safer for them (the masses)." He went on to say, "That's what drove me a man on a two-wheeler with a child standing in front, his wife sitting behind, add to that the wet roads a family in potential danger." The hope is that this inexpensive car will get Indian families off two-wheelers and into the safety of cars.

In terms of how the Nano compares to other economy cars in India, the Nano accelerates the same as the Maruti 800, a Japanese owned Suzuki. The Maruti 800 sells for around $4800, almost double the price of the Nano, making the Nano the obvious choice in terms of affordability.

Of course, not everyone in India is thrilled with the release of the Nano. Environmentalists fear that the Nano will cause India's crowded streets to be even more congested, not to mention increased smog in cities where breathing the air is already a health hazard. But Tata states that the Nano is not any worse for the environment and will not create any more smog than the typical motorbike.

Only time will tell whether or not the Nano will catch on, but the growing Indian middle class just might be ready to upgrade from motorbikes to cars, especially with such an affordable car on the market.

Source: http://asia.news.yahoo.com/071 230/afp/071230034414business.h tml

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