Rob Katz

India’s Model T: Tata’s $2000 Car Out by 2008

Tata With CarUpdate: Lee Schipper, Director of Research for WRI’s Center for Sustainable Transport, comments below on the implications of a low-cost car for India.

A mass-produced, affordable auto revolution is coming to India. Or, as BoingBoing suggests, ?make way for the hundred dollar laptop of automobiles:?

Tata Group Chief Ratan Tata told shareholders that the launch of the car would create a new paradigm in low-cost personal transport, carve out a new market segment and reach a broader base of the pyramid.

“The styling and designing of the car have been completed and prototypes are being tested in the plant. It will be a rear engine, 4-5 seat, four-door car with about a 30 horsepower engine,” Tata said in the company’s annual report for 2005-06.

The car will be launched in early 2008 and we believe it will be extremely attractive to the Indian consumer, particularly younger families, at a price level of about Rs one lakh, Tata said.

I absolutely love it when a big shot CEO uses terminology like ?Base of the Pyramid,? because it demonstrates how some firms at least know the concept. Whether they are doing it in a sustainable, profitable way…anyway, while I love this concept from a BOP and economic development perspective, what worries me is twofold. First, what about the environmental impact of hundreds of thousands of additional cars on India’s already-congested roads? Answer to myself: it will be up to Tata to make these vehicles as fuel-efficient as possible. Second, will this push Indian development toward the US model of roads and highways and provide a disincentive to well-planned cities and public transport?

Original links via IndianRaj and SouthAsiaBiz. Original article in the Hindustan Times.