World's Cheapest Car could be future of auto biz
By Jason Buckland, Sympatico / MSN Finance
Not long ago, whether people will admit it or not, we snickered at the unveiling of the Smart car, the tiny, hyper-fuel friendly compact that was and still remains a little – well – dorky.
Of course, we were the same group as a whole that cried Armageddon when gas prices shot up around $1.50 and we could no longer afford to fill our conventional vehicles. And then, ah crap, the economy stinks. Now being a car owner really sucks.
So in 2009, as more pop up around Canada, not many people bat an eyelash at the Smart car anymore. For every snide “I wouldn’t be caught dead in one of those!” barb, three or four “You idiot, do you know much that guy probably saves each month?” replies now follow.
The convention has changed in the consumer’s auto market, where the desired image of cool has largely given way to the desired image of frugality or, perhaps more appropriate, rationality. And it is because of this that yesterday’s release of the bite-sized, super-cheap Tata Nano compact in India is so intriguing to the future of car sales.
For all it’s similarities to the Smart car – the four-passenger Nano is just over 10 feet long, maxes out at a modest 105 km/h and uses only 4.2 litres of fuel to cover 100 km – Tata’s new model can boast one thing that could help it completely undercut its compact predecessor.
Price.
The Nano hails itself as the World’s Cheapest Car, retailing in India for the staggering Canadian equivalent of just $2,700, a far cry from the cheapest Smart car model (around $15,000).
There are no delusions about the Nano. It knows it only has one windshield wiper. It’s aware of the shortcomings of its miniscule 623 cc rear engine, and that you’d have to pay extra if you want air conditioning or power windows. And it certainly is conscious that your H3 will mockingly cough exhaust fumes in its face should the two ever meet on a city street.
But, as the New York Times muse, maybe that doesn’t matter anymore. “As the global economy withers and automakers bleed cash and cut employees,” writes reporter Heather Timmons, “even rivals say that tiny, wallet-friendly, fuel-efficient cars like the Nano might be where demand grows around the world.”
The Nano has its sights set on North America soon, Tata’s chairman said yesterday. A model fit for the Western Hemisphere is in production and could hit Canadian roads in as little as three years.
Who knows where the economy will be by then, or if a rabid market for cost-conscious vehicles will still exist? Odds are, though, we’re going to learn habits from this recession we’ll be bound to perpetuate. Like the Smart car before it, don’t be surprised if you’re laughing at a Nano in 2012 only to cherish one by 2013.
Posted by: The Doctor | Mar 24, 2021 9:06:38 AM
So, all these nay sayers from the manufacturing sector would rather have me buy a $30K quality domestic car? Look at every used car lemon guide published in the last 20 years. The Big 3 consistently produce the lousiest pieces of junk. Yeah, of course they are worried. With all the benefits plus wages, the REAL cost to make a union car is about $95 per hour here in Canada, and what you get is a piece of junk that is in the shop the first week after purchase. "Highest Initial Quality" just means it looks great on the showroom floor (just don't drive it). Yes, it has to be redesigned to meet our regulations (pleople, READ the article, then make your snide comments). This is the perfect car for in-town driving: groceries, movies, doctor's office, work- all with 5km of home for 90% of us. You certainly DON'T need a domestic sucking back fuel at 20mpg to accomplish this. And yes, people in India make $3000 per year, because everything else is comparably cheaper as well. Yes, I'll buy one. If it breaks, I'll buy another one. I have owned domestic cars in the past and I have no doubts Tata can build a more reliable car than the "Big 3." Time to shake the dead apples out of the tree and prune the branches
Posted by: carguy | Mar 24, 2021 11:43:02 AM
only one question to ask...remember the skoda?
Posted by: b cameron | Mar 24, 2021 11:59:02 AM
This car cant be any worse than whats out there in the new car lots. Looking back at the big three .. anything that was reliable was dis-continued ,, polymer side panel cars where great.. no rust... but motor or transmission would be crapping out before the body. Why cant the big three make a car to stand up.. they know what works and what does not.. maybe in the future,,, they will be thinking about selling qualtiy and longevity .. even today,, they are still pitching more horse-power,,, when alot or folks just want a car that goes where you point it at a reasonable speed... so what if it down shifts on a big hill....fuel economy is not in "increased horsepower" .. WAKE UP BIG THREE.. before it is too late.
Posted by: DB | Mar 24, 2021 12:20:33 PM
I think an econobox is what we need..small cheap reliable transportation good for folks that never had a new car and have been forced to drive old used junk or nothing. Student vehicles or second family vehicles rather than haveing two gas guzzling suv's in the drive way.. The two biggest things we overspend on in north america is homes and automobiles, perhaps if we learn to live more content lifstyles we could live with basic cars
Posted by: FRED | Mar 24, 2021 12:21:32 PM
AS LONG AS THE BIG 3 OR ANYONE ELSE DOES NOT PROFIT FROM THIS BY BRINGING THEM IN AND SELLING THEM AT A HIGHER PRICE!!!!
Posted by: sad | Mar 24, 2021 12:22:26 PM
Carguy, you obviously have not looked up Skoda, lately. Only because they are not available in N.A.... They are doing pretty well as a division of V W.
Posted by: Political correctiveness vs Reality | Mar 24, 2021 1:38:53 PM
I agree with "The Doctor". However knowing the "Big Three", one of them is sure to have their finger in the pie so as to cut competition. As for "Carguy", remember the Hyundai Pony?. Look where Hyundai is today, and YES, I would definitely buy one.... or maybe even two at that price. Heck, you pay more for scooters and atv's today, and for them to be allowed into Canada, they will have to pass our Ministry's stringent requirements and tests, so there should be no problem. They may not be the safest vehicle on the road, but for local commuting / shopping, it definetly would be a bang for the buck.
Posted by: Andy T | Mar 24, 2021 1:59:42 PM
Tata Nano may be good for downtown or low speed zone. Driving a Nano on our Canadian highway 100km/hr, I will worry about my safety. In strong wind weather condition, I can feel steering wheel shake when I was driving my GM 2500HD pick-up. If a 40' container cargo trailer passing by Nano, the air draft may be good enough to shake Nano's steering wheel.
Certainly, Nano have to pass a road safety test before it can launch on our highway. I may be worry too much!
If somebody driving a compact car, please speak up your experience on highway. I may be wrong because I drive pick-up truck all the time since I got my licence.
Posted by: shug | Mar 24, 2021 10:20:18 PM
$2500.00 USD in India, will translate to $10,000-$12,000 Base price in Canada, by the time Freight, Duties, import Tariffs, D.O.T.Compliance, UAW protectionism Tax, Dealer/Parts network set-up and Profit Margin. Don't forget the 2 page list of NA creature comfort accessories we can't live without. It should come out about the same as that SMART someone mentioned above.
Posted by: Sub | Mar 25, 2021 1:26:27 PM
I agree 100% with the comments from the DOCTOR. Just want to add more to it. Tata's Nano is a revolution in the car industry not because of its low price, rather because of the advancement in technology to assemble it. This is a true innovation from Tata. I am sure not everyone here knows that you yourself can assemble the whole car in your garage in less than 3 days just by having the right tools and a with help of the provided instructional manual. Yes, this is just like we assemble furniture from IKEA by following instruction manual. Well I am sure the Canadian govt will not allow it to happen here because of safety standard, nor the Indian govt allow in India. But whats interesting news is that Tata wants licensed dealers (will provide free training to the dealers to assemble it in dealer showrooms) or say new entrepreneurs to get TATA license to assemble it with certified training at their backyard. This will create new job industry. In a nutshell, the basic idea is that once you (new entrepreneur) orders a Nano, Tata will ship the unassembled parts (includes everything) in less than 3 days to you via special cargo courier (the box will not be bigger than the 3rd row cargo space in a big SUV) and you open the box and assemble the car in 2-3 days. Tata has started a lot of home entrepreneurship in India already who have taken training and signed up with Tata for a dealer agreement for larger production. Tata has a great program to monitor the quality of each vehicle out in the street. Tata has shown for the last 20 years how reliable their cars are and I am justing waiting for this nano to hit the Canadian street. Those of you who have cocern about safety, let me tell you Tata themselves have advertised this car for the city streets and this is NOT for the highway. Now think about how much percentage the average Canadian drives in City compared to the highway.But as SHUG has commented below, we have to see how far the Big 3 goes to influence the govt to add this and that taxes and freights and all those craps to make a USD 2000 car cost over 15000 in Canada so that no one buys it because of the high price. I think now canadian govt needs to come to the reality for its own people and needs far sighted view of giving the average canadians a heavier pocket and a quality vehicle. Someone pointed out that Nano has one wiper.. But the reality is one wiper is enough to cover the whole windshield and also looks great and non-clumsy. Once it passes the Canadian safety standard I am sure we all will get a great vehicle to boast for in our small garages and squeezed parking lots.
Posted by: CDN Analyst | Mar 25, 2021 4:17:38 PM
Let's clarify a few things here first: 1) If Tata manufacturers this Nano vehicle in India to be retailed in Canada, the shipping and logistical costs will add at least 50-100% to the price you see above. 2) Based on the materials and processes used to produce a sub-$3,000 vehicle, it is very unlikely it will meet even the most basic safety requirements required by Canadian law. For example, it does not even come with air bags, a feature required by law since 1994. We've all seen the crash tests on Youtube of cheaply-manufactured cars (i.e. Chery Amulet). 3) The purpose behind this Nano vehicle (press release) is to "...make car ownership accessible to millions of the world's poor". With a long list of countries offering a much stronger need and fit than us, their priority will not likely be the Canadian market very soon. However, when the Nano does eventually get here, it will increase competitiveness, which is better for the consumer.
Now, on to 'The Doctor'. First of all, I hope your name pertains to your expertise in the medical field, as your automotive knowledge is bias and very inaccurate. In addition, your negativity and unprofessionalism would certainly cause a legion of hypochondriacs and rationalize second opinions in any field you 'specialize' in. Or, you are just some hack with a keyboard and a grudge waiting to join the 'I hate the Big 3' parade by waving your flag.
I am not going to address your hollow opinions, only correct your inaccuracies: 1) "Highest Initial Quality" is an award from J.D. Power based on nearly 100,000 actual owners after purchase. In 2009, Buick, a division of GM, a domestic manufacturer, took home top honours. This includes luxury divisions like Lexus and Porsche. 2) "...you don't need a domestic sucking back 20mpg to..." makes the generalization domestic-manufactured vehicles are both inefficient and unnecessary. I hate to single out only GM, but their website identifies that for the 2009 model year, they not only produce the most Hybrid models, but also the most vehicles that get better than 7L/100km (43mpg) of any manufacturer. Ford is also introducing more Hybrids and small vehicles and Chrysler has electric vehicles in the pipeline. Keep in mind, many of these are developed and/or manufactured right here in Canada.
To all others, I hope you found this informative, encouraging and possibly surprising. To those who previously agreed with 'The Doctor', I'm glad to have provided a second opinion.
Posted by: CDN Analyst | Mar 25, 2021 4:20:13 PM
Let's clarify a few things here first: 1) If Tata manufacturers this Nano vehicle in India to be retailed in Canada, the shipping and logistical costs will add at least 50-100% to the price you see above. 2) Based on the materials and processes used to produce a sub-$3,000 vehicle, it is very unlikely it will meet even the most basic safety requirements required by Canadian law. For example, it does not even come with air bags, a feature required by law since 1994. We've all seen the crash tests on Youtube of cheaply-manufactured cars (i.e. Chery Amulet). 3) The purpose behind this Nano vehicle (press release) is to "...make car ownership accessible to millions of the world's poor". With a long list of countries offering a much stronger need and fit than us, their priority will not likely be the Canadian market very soon. However, when the Nano does eventually get here, it will increase competitiveness, which is better for the consumer.
Now, on to 'The Doctor'. First of all, I hope your name pertains to your expertise in the medical field, as your automotive knowledge is bias and very inaccurate. In addition, your negativity and unprofessionalism would certainly cause a legion of hypochondriacs and rationalize second opinions in any field you 'specialize' in. Or, you are just some hack with a keyboard and a grudge waiting to join the 'I hate the Big 3' parade by waving your flag.
I am not going to address your hollow opinions, only correct your inaccuracies: 1) "Highest Initial Quality" is an award from J.D. Power based on nearly 100,000 actual owners after purchase. In 2009, Buick, a division of GM, a domestic manufacturer, took home top honours. This includes luxury divisions like Lexus and Porsche. 2) "...you don't need a domestic sucking back 20mpg to..." makes the generalization domestic-manufactured vehicles are both inefficient and unnecessary. I hate to single out only GM, but their website identifies that for the 2009 model year, they not only produce the most Hybrid models, but also the most vehicles that get better than 7L/100km (43mpg) of any manufacturer. Ford is also introducing more Hybrids and small vehicles and Chrysler has electric vehicles in the pipeline. Keep in mind, many of these are developed and/or manufactured right here in Canada.
To all others, I hope you found this informative, encouraging and possibly surprising. To those who previously agreed with 'The Doctor', I'm glad to have provided a second opinion.
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