Chasing Tata: Automakers on path of Super-Cheap New Cars

Tata Motor’s “one-lakh” Nano, the world’s cheapest car, has caused
quite a stir. It’s an amazing vehicle due to its price, but also due to
the fact that it’s tapping into a market that no other brand has ever
been able to. At the same time the Nano might not be in for the
smoothest ride, particularly since many mainstream automakers want in
on the ultra-cheap segment, including Renault-Nissan, Toyota, Fiat and
Volkswagen.

Already
we know that VW’s Up! will be produced in two variants, including a
style-driven, gadget-loaded micro car for the first world, and a basic,
stripped-out model for developing nations. Toyota is also looking to
follow in a similar path. The brand’s iQ will bring urban chic to
Europe’s streets, but having just invested $343 m into a new plant in
Bangalore, India, Toyota could be ready to wheel out a much more basic
version of the car for local consumption. Neither the Volkswagen Up!
nor the iQ will compete directly in terms of price with the Nano, but
they will undercut current offerings by a large margin, broadening
their respective customer bases.

Meanwhile,
the one brand that is trying to target Tata is General Motors, and, not
surprisingly, they’re tapping into their Chinese partners Wuling Motors
for assistance. GM’s plan of attack is reportedly similar to Tata’s,
using basic materials and economies of scale to make a budget vehicle
possible. Like the Tata, the vehicle will be made for local markets,
abiding by their safety standards - a sign that it won’t be marketed to
established industrial nations.