Tata's “One Lakh” Car Should Overhaul the Entire Indian Carmaking Industry (TTM)

Ratan Tata, chief of Tata Group, today said “the ambitious Rs 1 lakh car will be manufactured from three-four places, including West Bengal and Uttaranchal.” Tata Motors has already finalized a Rs 1,000 crore plant at Singur in West Bengal.

The much-touted Rs 1 lakh car would be launched in early 2008, as the company had completed its styling and designing, as well as testing the prototypes within the plant. Mr. Tata added that the car would create a new paradigm in low-cost personal transport, carve out a new market segment and reach a broader base of the pyramid. The car will be a rear engine, 4-5 seat four-door car with a 30-horsepower engine.

Mr. Tata later added that “The car will be launched in early 2008 and we believe it will be extremely attractive to the Indian consumer, particularly younger families, at a price level of about Rs 1 lakh.”

If the commercial production of the car is successful and profitable, then it would certainly change the scenario throughout the Indian car industry. Just as an example, a good motorbike in India costs around Rs. 50,000 and so if a car costs around Rs 100,000 and it's from a trusted company like TATA, there's no reason that it shouldn't be an instant hit (source: Business Standard).