The People’s car

Tata unveiled today at the Delhi Auto Expo its new 2500$ (1700 €) car, the TATA NANO. This is the cheapest car ever been produced. Competitors from China and Asia sell them minimum at double prize. So everybody (media, people) even in Europe, is amazed about the car and more about Ratan Tata, the owner and CEO of the Tata Group, who made this vision come true. Undoubtly and obviously the car is very simple and basic without any comfort. This will be a revolution at the auto sector not only in India, it will be a change in any low-income or developing country.

The reason to develop such car isn’t only profitability (I wonder how high the margin is) it is more meeting a need of the Indian mid class, looking for prosperity. Salaries and incomes rise and more consumer goods floating the Indian market.
The only concern I have, is that the infrastructure in India is still not ready for the car or better the invasion of millions of NANOs. The country which has not any sufficient and efficient public transportation is not ready for the NANO. Every major city has massive traffic jams during peak hours, turning a 20min ride into 2hours (average speed in Bombay during peak hours 7km/h). Efforts building new roads are not enough and a radical concept is missing. Simply: More roads attract more cars.

I predict a big collapse in 5-10 years with major impact on the economy if India doesn’t start thinking big about their infrastructure problems. Maybe Ratan Tata will invent a low cost road for its low cost car? The name probably will be TATA FLYOVER