A good new car for $2500, is that possible?

One of ideas I had about my blog is not only to write how I am doing but also to share new things that I learn here in my studies. And recently I had a lecture from Tata Motors about technology transfer. The speaker had really good presentation skills and therefore I decided to analyse a bit how good is the cheapest car in the world.

But about everything in order.

What is Tata Motors?
- India`s largest fully integrated automotive company
- World`s second largest heavy bus manufacturer
- The most popular model Tata Indica had 1 milion models sold in November 2007.
- Owner of Jaguar-Land Rover in Europe.

What is Tata Nano?
Tata Nano is a car that was launched in Mumbai on March 23, 2009. The car was priced of at 130,000 indian rupees or $2500 and is the cheapest new car sold in the world. The car is really tiny, just 3099 mm long and weighs 600 kg. For example my old car Renault Scenic weighed 1400 kg, more than two times more!

What`s the car specifications?

The car has a 2 cylinder, 624 cc engine. It has 35 horse powers and can reach 105 km/h speed. So definitely this car is only for driving in the city. Of course for people living in huge metro areas it makes sense to have this as there is no place to go more than 100 km/h anyway. In my opinion for $2500 these specifications really are worth attention. Just to compare with another city car Smart (produced by Daimler) Tata Nano has only a little bit less power and is 7 times cheaper!

The car is so cheap, maybe it is made of cheap unreliable parts?

To my surprise, the suppliers of many parts for manufacture of Tata Nano are qualitative image companies from Europe and USA. For example Bosch is supplier of the diesel injection pump and Delphi made the instrument cluster. Of course, this does not mean that the suppliers did not use cheapest possible materials, but still I believe that these names give some sort of quality guarantee.

Do people buy it?
In first year there have been sold 60 000 units. But the car has been introduced only in India yet. The introduction of Tata Nano to European markets is planned to happen in 2011.

Why do people buy it?
According to survey in India the main factor to buy Tata Nano, was that price was the same as for the bike, but driving a car would enhance persons social status. Thinking in European reality most probably people would buy it because driving a car and not public transport also enhances one`s social status. The second most popular answer was a suggestion from friends and the third one - the maintenance cost is really low.

Ok, but still there has to be something wrong with this car...
Well, I did a small analysis. The main complaints regarding driving comfort was that Tata Nano is more accident prone, it is uncomfortable car. I have a feeling these complaints are true cause the smaller the car - the more likely it is to be missed by some careless driver and the less space there is for a person.

Regarding the performance the main complaints were that pick up is not effective and engine is not powerful enough. Interesting fact - I could not find in official Tata website any information how fast the car is gaining speed, so this serves as some kind answer for these complaints, it probably takes quite a while to gain 60 km/h or even much longer to get 100 km/h.

Would I buy it?
For me personally - probably not. A tall guy like would look quite interesting in such a car I think. Even though the car looks high enough for my head, I am really concerned how much space is there for my legs. If there is enough - I would consider buying it, but only as a second car, which I use only for city travelling. On the other hand if you are searching for a small car for your daughter/wife - seems to be quite a good option.

But for now - I`ll just have to use the bus.