In the September of 1998 kinetic had an ambitious plan of producing a truely people's car. It was called as the City car.
The company, hoped that the duty concession of 15 per cent duty (equivalent to the duty on auto-rickshaws) will come sooner or later. Interestingly, the micro-car's name `City' was in direct conflict with Honda's `City' brand name. Honda has a separate joint venture with Delhi-based SIEL Ltd to make Honda cars in India.
Kinetic's small car, which was touted as the `
smallest of the small cars' by analysts, was to be priced at Rs 1.25 lakh. Kinetic said as the cost of the car will shoot up beyond the Rs 1.5 lakh mark after paying 40 per cent duty, it will not meet the target customers of two-wheeler users who would like to upgrade to cars. Hence, as the new price would not be competitive, it has decided to drop the car plans.
Then Tata moved heaven and earth to keep the price of
Indica (its current model) down. In fact, the original ambition powering the passenger car foray of Tata Motors (it was known as Telco then) was to make a car that would be roomy, entail low operational costs, and sell at the same price as the 800. Not surprisingly, the Indica managed only the first two objectives. So, the 800 (around Rs 2 lakh) continued to be the preferred choice for first-time buyers.
About 20 years after its launch on Indian roads, its position as entry level small car is challenged once again. Yet again, car-makers are trying to launch new models that will fight the 800 on price. The front runner is Tata Motors, which has been talking about a project that now sounds incredible, to bring out a car that will retail for as low as Rs1 lakh.
Tata has gone one step ahead and are targeting India's approximately 65 million two-wheeler owners to market the much-touted small car.
Update:-Pictures & details of Tata 1lakh ($2500) car Nano....As per reports, Tata will fit the car with a 600cc engine placed at the rear of the vehicle. The four-door car will be designed to seat 4 or 5 people and is expected to be priced at Rs 100,000 for the base model ex-factory. Variants with extra features such as power steering will be more expensive. It will be made at a plant in West Bengal. The concept has already caught the imagination of car makers and buyers worldwide.
Italian car maker Fiat is providing advice on engineering and development for the small car. Raw material accounts for approximately 70% of a car's cost. To meet this price tag the Tatas will have to redefine the concept of a car itself. And in that case, the question is whether it will meet increasingly stringent emission and safety norms?
“The car would be totally safe and eco-friendly. India’s fatality rate in car accidents is more outside the vehicle, whereas in the United States fatality rate is more inside the vehicle. Hence the issue of safety is more to do with roads and traffic management,” adds Chenoy.
Competitors are skeptical about the price and quality of the car, which the group says will have a 600-cubic-centimeter engine pumping 33-horsepower and will be capable of 80 mph.
I also read some where that people should sell off their small cars like M800, alto, Wagon R, Indica, Santro before the launch of Tats's small car in 2008 as the market for second hand cars would crash down by 25 to 30%. I find such a statement ridiculous. May be second hand M800 has a stiff competition, that too if the product turns out to be as good as it claims to be and if priced around 1 lakh. But definitely not Wagon R and Santro which sell like hot cakes and are very reliable and are much more safe 1 liter cars.
The threat is mostly to the 2 wheeler industry as also seen in the last quarter when sale of 4 wheeler went up as there was a fall in 2 wheeler sales.
Competition:-Bajaj Auto in alliance with Renault-Nissan will be involved in the development and manufacturing of another economic small car. Bajaj would also market and distribute, using its vast network of two-wheeler dealers.
The car is expected to hit Indian roads by 2010. Bajaj has set up working groups for diverse aspects of the car. The car will be an upgrade from a conventional three-wheeler.
Hyundai Motor is also working on a sub-compact car. Hyundai Motor India (HMIL) president Ashok Jha admitted that a small car would be developed at the proposed R&D facility in Hyderabad. It could either source an 800cc engine from the parent company or it could develop a 650cc engine if need be. The car is likely to carry a sticker price of Rs 1.25 lakh, similar to the one proposed by Renault-Bajaj Auto combine.
Update:-Pictures of Bajaj Small car: LiteWith so many plans for as many products, India not just seems poised for small car market explosion but may also be on way to becoming an export hub for small cars.
While this happens here BYD from China also has an entry for the
worlds cheapest car.
BYD Auto is a Chinese automobile manufacturer based in Shenzhen, Guangdong Province, People's Republic of China. The firm is part of the BYD Company Limited and was founded in 2003.
The firm was created when BYD bought the bankrupted government auto maker Qingchuan and acquired one of the tightly controlled permissions to produce automobiles in China.
BYD is planning to build a car called the F-1 which it intends to sell for a mere $3,000. Obviously it wont be competing with the Mclaren F1. The care has a great ressemblance with the Toyota Aygo or rather i would say its a clone of Toyota Aygo. (Like we have Pulsar cloned as Gulsar)
Picture of BYD F1:-
Sources:-
The
ET, and other internet resources.
Read the incredible story of Tata 1 lakh car on
rediff here.
Related posts:-
The first two test units of the Tata Nano have just rolled out from a new assembly line at Tata Motors’ Uttarakhand plant that is now nearly ready, suggesting that commercial production of the small car will actually begin at Pantnagar nearly a month before it begins at Singur. 
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