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Indian automaker unveils world's least-expensive car

A media crush surrounds the world's cheapest car, the $2,500 Nano, made by India's Tata Motors, which is the lead bidder for Ford Motor Co.'s Jaguar and Land Rover units. A media crush surrounds the world's cheapest car, the $2,500 Nano, made by India's Tata Motors, which is the lead bidder for Ford Motor Co.'s Jaguar and Land Rover units. (Mustafa Quraishi/Associated Press)
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Associated Press / January 11, 2008

NEW DELHI - For millions of people in the developing world, Tata Motor's new $2,500 four-door subcompact - the world's cheapest car - may yield a transportation revolution with as great an impact as Henry Ford's Model T, which rolled off an assembly line one century ago.

The potential impact of Tata's Nano has given environmentalists nightmares, with visions of the tiny cars clogging India's already-choked roads and collectively spewing millions of tons of carbon dioxide into the air.

Industry analysts, however, say the car may soon deliver to India and the rest of the developing world unprecedented mobility.

"It is a potentially gigantic development if it delivers what has been promised," said John Casesa, managing partner for the Casesa Shapiro Group, a New York-based auto industry financial advisory firm.

"I think there is immense unmet demand for a vehicle of this type, because it effectively eliminates the great leap required to go from a two-wheel to a four-wheel vehicle," Casesa said. "They are creating something that has never existed before, the utility of a car with the affordability of a motorcycle."

The basic model, expected to roll of assembly lines this year, will sell for 100,000 rupees, or about $2,500, but analysts estimate customers could pay 20 to 30 percent more to cover taxes, delivery, and other charges.

Company chairman Ratan Tata, who introduced the car at India's main auto show, has long promised a $2,500 "People's Car" for India - a country of some 1.1 billion where only seven of every 1,000 people own a car. That vow has been much-derided by the global industry which said it would be impossible without sacrificing safety and quality.

"A promise is a promise," Tata told the crowd after driving onstage in a white, luxury edition Nano, his head nearly touching the roof. Four company executives emerged from another. Tata says the Nano can seat five.

The company will not say how the price was kept so low on the basic version and won't say how much the luxury Nano will cost until it hits showrooms toward year-end. The company also refused to let reporters sit in the car, let alone drive it.

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