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March 24, 2021

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.


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.



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...