Travel | ON THE ROAD

Nano's low price comes at a cost

It’s hardly surprising that Tata Group Chairman Ratan Tata chose the theme from the film “2001: A Space Odyssey” as the soundtrack to his unveiling of the Nano mini-car. Simply put, this car is epoch-making. It is the Ford Model T of India.

In the same way that the famous Ford changed the future of transport forever when it burst onto the American market in 1907, the $2,500 Nano promises to revolutionize travel across the subcontinent.

Ratan Tata knows the impact of putting a car within reach of millions who previously could not afford one. “I hope this changes the way people travel in rural India,” he said at the unveiling. “We are a country of a billion and most are denied connectivity.”

And his timing is perfect. With one of the world’s fastest-growing economies, India is booming. More Indians than ever before can afford luxury items such as cars, and car sales are rising by around 10 percent every year.

Tata put five years of research into the 3-meter-long, four-seat Nano. Input came from across the world, including Italy and Germany, but the car was designed and built in India. Tagged “The People’s Car” by Tata, the lightweight aluminum body contains a rear-mounted 623cc, 33hp, 2-cylinder gasoline engine and weighs about half a ton. Starting at $2,500, the basic model has a four-speed manual transmission, seat belts, locking, wind-down windows and one windscreen wiper. While its luxury version will have air conditioning, nowhere is there any mention of air bags. Those kind of specs make the Nano reminiscent of the dinky models Japan was producing 30 years ago.

And that’s what concerns me. Without the pressure to produce vehicles that meet the kind of strict safety and emissions regulations now standard in advanced economies, companies such as Tata — which is best known as a truck builder — can make cheap cars such as the Nano.

In fact, though the Nano conforms to India’s emissions standards (which are below European levels), Ratan Tata argues that it will also meet European standards. But new and stricter so-called Euro 5 emissions regulations — some of the toughest ever — come into force in 2009, and Tata will have an uphill battle to meet those.

As to safety, Ratan Tata tells us that the Nano has crumple zones, a strong passenger compartment and intrusion-resistant doors. But the accepted wisdom among major carmakers is that it costs well over $2,000 per unit just to design and build a rigid passenger structure — let alone a whole car.

To many Indians wanting their own wheels, however, such issues won’t matter. The Nano is half the cost of the next-cheapest cars in India — China’s QQ3Y Chery and the Indian-built Maruti 800.

The Maruti is actually manufactured by Suzuki, which has operated in India under the Maruti name since 1983. A cheap rival such as the Nano is sure to impact on its business, but Japan’s biggest manufacturer of small cars is putting on a brave face.

“(While) Suzuki does feel pressure from a car that will come to market at half the price of our cheapest car in India, we do not think it will take market share away from us,” the company said in a carefully worded response to questions from The Japan Times.

Suzuki’s current market share across all 12 of its models on the Indian market is 660,000 cars annually. But according to Suzuki, the Nano is not aimed at existing car buyers but those who until now have only been able to afford motorcycles.

Ratan Tata has said as much. “From Mumbai to Calcutta, I observed families riding on two-wheelers — the father driving the scooter, his young kid standing in front of him, his wife seated behind holding a little baby,” he said. “It led me to wonder whether we could conceive a safe, affordable, all-weather form of transport for such a family.”

So Suzuki, maker of such models as the Swift and Wagon R, insists it isn’t yet flustered about the new kid on the block. Just as it’s going to be a long time before carmakers such as China’s Brilliance and Chery supply world markets with vehicles that pass stringent safety and emissions tests — let alone meet acceptable handling and performance expectations — so cheap cars from India won’t be of high-enough quality for some time to threaten the global brands.

The Nano will, of course, deliver extra mobility to countess Indians — but at what cost in terms of global warming? Clearly, the addition of 250,000 Nanos a year to India’s roads is an environmental headache about to take hold.

“India’s (road) infrastructure doesn’t have the capacity (to handle so many extra cars),” says air-pollution specialist Vivek Chattopadhyaya. “Even if they (Tata) claim the car will be fuel-efficient and clean, air quality in India’s big cities is already more than twice the safe limit.”

That’s the Catch-22 facing both India and China. Improved mobility is a major advance in the standard of living of people in both nations. But governments there must weigh their citizens’ right to mobility against the environmental impact of hundreds of thousands of extra fossil-fuel burning cars clogging already congested roads.

To mobilize or not to mobilize many millions upon millions more people: that is the question. Scarier still, both nations have already answered it.

Peter Lyon is a 20-year veteran motoring journalist who covers the Japanese automotive industry for more than a dozen publications worldwide.

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