Little Tatas, huge hype

January 30, 2008 - By John LeBlanc

The Detroit auto show wrapped up just last weekend, but the auto industry is still buzzing about a car that was introduced the same week, albeit 11,881 kilometres away at the New Delhi Auto Expo in India.

It’s called the Tata Nano. And no, it’s not an Apple iPod knockoff, it’s more like a five-passenger micro car (61 cm shorter than a Mini Cooper) with a $2,500 (U.S.) price tag — about $10,000 less than the cheapest new car sold in Canada, Chevrolet’s Aveo.

There are no official figures, but the tiny Tata’s drivetrain is shockingly similar to last year’s $16,700 Smart ForTwo: rear-wheel-drive, 623-cubic-centimetre engine, 35 horsepower, and a top speed of 120 km/h.

As you’d expect, the Nano’s paucity of features makes the Aveo look like a Roll-Royce Phantom. Radio, airbags, and a passenger-side mirror are all options. And if you want air conditioning to survive India's 45 C summers, you will need to pay more.

The fact no Western journalists have either sat in or driven the Nano hasn’t prevented the publishing of hyperbole or wild assumptions about the car.

Optimists gleefully crow that the Nano will “revolutionize the auto industry,” and do for India's expanding middle classes what the Volkswagen Beetle and the Mini did to “democratize motoring” in Europe after the Second World War.

Time magazine threw any credibility it had under the bus by prematurely crowning the Nano as one of the 12 most important cars of all time, right alongside legendary cars like the Model T, Beetle, Chevrolet Bel Air, Toyota Corolla, Mini and Honda Civic.

Even before Ratan Tata, chair of Tata Motors, drove the car onstage to “spontaneous” applause during the car’s reveal, Nano naysayers accuse it of leading to millions more automobiles hitting clogged Indian roads, adding to the already regrettable air and noise pollution.

Outside, Greenpeace activists held up banners calling for the world to tackle climate change and "Cut CO2'' rather than build millions of ever-cheaper cars. Even the chief climate scientists for the United Nations, Rajendra Pachauri, said last month that he was “having nightmares" about the prospect of the Nano.

Currently, only about 12 in 1,000 Indians have a car, according to the UN (in the U.S., the ratio is 765 to 1,000.) Already, 1,000 new cars enter the streets of the capital New Delhi every day.

Critics like Pachauri are fretting that if the world's second most populous nation’s rapid economic growth pushes its car-ownership ratio to that of the U.S., that would put 864 million cars on India's roads, more than three-and-one-half times the figure in the U.S.

One of the reasons the little Tata received more attention than any of the reveals at the Detroit show is the car’s potential threat to the Western autoworld’s status quo.

If the Nano ends up the success that some analysts are predicting, it will have one-upped Western automakers such as General Motors, Ford, Toyota, VW, Mitsubishi and Renault-Nissan, which are looking for sales growth in Asia, Africa and Latin America at a time when the European and American markets are flatter than a Saskatchewan ski hill.

Whether one is for a $2,500 People’s Car, or against it, predicting whether is will be successful is a fool’s game. The world we live in — where economic, political, and social variables impact us on a global scale — has more opportunity for change than ever before.

So let’s give the current maelstrom of Nano news a reality check.

For one, Tata says it can only produce 250,000 Nanos a year — max. Even then, its social acceptance into the traditional Indian culture is no slam dunk. And as far as selling outside of India, the automaker says it’s at least two to three years away before exporting to other emerging markets in Africa and Latin America.

Second, no one can argue the urgency to develop new alternatives to the internal combustion engine or the burning of fossil fuels.

But Western environmentalists pooh-poohing the Indians’ right to enjoy the status and freedom that comes with not walking or riding a donkey smacks of convenience, colonialism, or hypocrisy — or all of the above.

The marketplace will take care of both the optimists and pessimists: If all of these cars flow into emerging markets like India and China, the price of gas will undoubtedly get to the point that even filling the tank on a $2,500 Nano will become too expensive.