Retributions  

It is time the issue of urban transport is addressed in a holistic manner. Five years ago, Ratan Tata made a tryst with destiny. He promised a car for Rs one lakh-a people’s car-and he has delivered. The new Tata Nano has been widely praised for its indigenous design, engineering skills and aesthetics. In the process, TATA’s have contributed to the maturing of a host of ancillary suppliers which can be expected to contribute positively to India’s manufacturing capabilities. The TATA’s have gone to extraordinary lengths to meet the price target; yet, NANO is reportedly capable of meeting the stringent EURO 4 pollution norms and has passed all required safety tests. Moreover, in an era where the issue of fuel efficiency has gained increasing salience, Nano’s claimed mileage of 50 miles/gallon is comparable to the best hybrid cars in the market including Toyota Prius.

Nano is not competing with any existing car model in the Indian car market. Its nearest competitor-Maruti 800- at Rs 2 lakh is almost double its price. By providing existing two wheeler drivers with a realistic and affordable option of owning a car, it can help expand the car market to the relatively lower middle class. Over two decades ago, Maruti 800 redefined the car market in India; Nano can take the automobile revolution to the next level. More importantly, Nano can spur product and process competition among the car industry not only in India but also abroad. Similar incentives would be present in the still-growing two-wheeler segment as well. It is the dynamics of competition whose benefits are likely to be far more relevant in assessing the overall net benefits of NANO.

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