Tata's Nano causes a stir, and it's not even there
The most-talked-about car at the Detroit auto show this year isn't even present: Tata Motors Ltd's $2,500 Nano.
The vehicle planned by India's largest truckmaker would violate emissions and safety regulations in the United States, Europe and Japan, auto executives from those markets said. The Nano wouldn't meet consumer expectations in developed countries for creature comforts such as air conditioning, they said.
Yet they're all wondering how to respond to it. "What we're seeing really is the automotive world is divided into two distinct markets," General Motors Corp Vice-Chairman Bob Lutz told reporters at the North American International Auto Show.
"It's akin to the coming of the Ford Model T," said Aaron Bragman, an analyst at Global Insight Inc in Lexington, Massachusetts.
With the US market coming off its slowest year in a decade, sales down in Japan and Western Europe stagnating, GM, Toyota Motor Corp and other automakers are turning to emerging markets, where sales are growing more than 10 percent a year.
For GM, Toyota and other automakers the Tata entry means "pressure to come down to that price and play in that field," Bragman said.
Mumbai-based Tata's unveiling of a prototype of the Nano, India's cheapest car, at the Delhi auto show on Jan 10 is forcing established automakers to decide whether they want to go compete with such entrants, said John Casesa from Casesa Shapiro Group in New York.
"The reason why it's important for the GMs and the Toyotas of the world is because if these products are successful, they will give these new companies scale, earnings and experience to move farther upmarket where they would compete directly against the European, Japanese and US models," Casesa said.
Agencies
(China Daily 01/16/2008 page16)
