Ratan Tata, chairman of India's second-largest and longest-established conglomerate, said he is pressing ahead with a project to bring to market a $2,000 car (Rs 1 lakh), which he believes could revolutionise personal transport in India and some other Asian countries. He conceived the idea several years ago: to use components from the region's large scooter and motorcycle industries to create a basic four-seater, four-door car to which the region's millions of scooter and motorcycle riders, plus 3-wheeler users could aspire.

"It is my dream to make the car a reality within the five years I remain as Tata chairman," said Tata. The project has become more ambitious as it has entered trial engineering phases — most notably with the cutting of the target retail price by one-third from the originally envisaged $3,000. Total material costs for the vehicle are claimed to have already been pared down towards the $ 1,200 mark.

The vehicle might not be acceptable to Western consumers but "it would not need to be a poor substitute for a car," he said. "It will look like a car and have proper seating-stretched canvas seats would not, for example, be acceptable. It would be all right for it to be a bit more noisy than an ordinary car, but it has to be both simple and safe."

Despite the projected price being less than half that of the cheapest car on the Indian market, a basic Suzuki model, Tata said it was not unrealistic and would not need to be subsidised. The vehicles would be produced primarily in kit form for assembly at several places around India, to create local employment. They have a potential market in other Asian countries such as Vietnam, Malaysia and Indonesia, said Tata, in addition to bridging the gap for 2 million to 3 million Indians between powered
two-wheelers and cars.