Ratan Tata car's 30 bhp, four-door, 4-5 seater
Daily News & Analysis — June 24, 2006

There is "great speculation", acknowledges Ratan Tata, chairman of Tata Motors, on the proposed Rs 1 lakh small car. "We believe it will be extremely attractive to the Indian consumer — particularly the younger families — at a price level of about Rs 1 lakh." In a letter to shareholders of Tata Motors, Tata gives a brief update on the status of this project. The speculation is mainly due to the terms of cost, driveability and fuel economy" of the proposed new car, he said.

So here's how it will be: To be launched in early 2008, the car will be a rear-engined, 4-door, 4-5 seater powered by a 30 brake horse power (BHP) engine, Tata said. The car emerging out of Tata group's desire to service the aspirations of people at the bottom of the pyramid will not only challenge Maruti Udyog's most popular small car Maruti 800 which is powered by a 39 brake horse power engine and costs twice as much, but also the two-wheeler manufacturers. "The styling and design of the small car have been completed and the prototype of the car is being tested," Tata said.

The surprise news comes from way beyond the shores, though. From Jeffrey Immelt, CEO of General Electric. In an interview, he said the powerhouse has assigned 50 of its staffers to work on the plastics for the car. On the proposed strategic alliance with Fiat SpA of Italy, Tata said it will explore opportunities of mutual benefit whichcould include possible sourcing of technologies, power trains and major aggregates from Fiat, sharing of common vehicle platforms between the two companies and even possible joint development of models which could be badged and sold by both companies in different geographies.

Stating that rising fuel costs added strain on the automobile industry in both commercial vehicle and passenger car segments, the Tata chief said Tata Motors, like its peers, is exploring various new technologies to meet the new challenges arising from spiralling energy costs.