Lately it seems like everywhere you look people are starting to move up as fast as George and Weezy. Prices on typically expensive goods are coming down so that companies can make a play for the disposable income of the world’s vast middle class. Monday’s L.A. Times brought us word of a ridiculously priced car out of India:
Tata Motors Ltd. is set to unveil the world’s cheapest car as early as January as it takes the growing interest in low-cost vehicles to a new extreme.
The Indian carmaker will launch its $2,467 vehicle by the third quarter of 2008 and may unveil it at January’s Auto Expo in New Delhi, Managing Director Ravi Kant said.
Separately, Tata Motors is developing a line of small hatchbacks and mid-size sedans to be introduced next year. India produces 1.3 million cars a year. With the market growing at 10% to 12% per year, this could reach 3 million within a decade.
The four-door car — a pet project of Tata Group Chairman Ratan Tata — would be the cheapest by far in its class. The current cheapest, the Maruti 800 produced by Suzuki Motor Corp., sells for more than $4,000. [Link]
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Just to clarify, I don’t think that a really cheap car is ridiculous. No. What I find crazy is the exact price. Somewhere there was a room full of marketers that decided that $2,467 was the exactly right price for this car! I mean, why not $2,499? But this is going to be a hooptie right?
Competitors are skeptical about the price and quality of the car, which the group says will have a 600-cubic-centimeter engine and come in a range of models.
However, [Managing Director Ravi ] Kant said: “It will be a good-looking car which you will want to purchase…” [Link]
Well, okay then. The Christian Science Monitor had an article last week that hinted at how owners of such a cheap car might immediately seek to pimp their ride:
While its materialistic glamour revolution is still in its infancy, the new capitalist India is all about keeping up with the Kumars. At all socioeconomic levels, Indian shoppers are becoming more “aspirational,” using their new wealth to buy status in a country where social cachet is a vital commodity.
“From the guy at the bottom moving from buying soap to buying shampoo to the guy at the top trying to act like his global counterpart, this is the first time that Indians have been able to afford discretionary spending,” says Subbu Narayanswamy, a Mumbai-based analyst for the consulting firm McKinsey & Co…<
p>”What the Indian consumer wants is the latest technology, and in the premium car segment they’re looking for a fully loaded car,” says Linus Schmeckel. “They don’t like to be seen as second-class consumers…” [Link]
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p>Of course, there is a downside to all of this. Increased spending means increased consumption means increased waste and carbon emission. I realize, however, that it is hypocritical of me with my nice things to lament someone buying a $2,467 car just because it will allow a greater segment of the population to pump out greenhouse gases (given the fact that doing so could improve their economic well-being). That is after all the main argument that China uses in rejecting Kyoto. “Poor nations should be able to produce and consume in a more inefficient manner until their populace is raised out of poverty. Until then rich nations should carry the burden.”
Hmmm, maybe I will just focus on the cool things you can deliver to the masses when you use technology to make things cheap.
Some of the comments remind me of class and imperialistic arrogance. The unwashed masses should not own a car. Let everyone own a car. If there is bad traffic then so be it. If you dont like the traffic stay at home or leave. I wish the roads would get better in India. But not likely in the immediate future. As for greenhouse gas emissions, the developed nations advising the developing ones is worse than the kettle calling the pot black.
Randomizer – totally understand. I refused to get a car in Bangalore because a bike was faster – I could drive on the footpaths. Buses in Bangalore are ok if you can get a seat. Else – very very uncomfortable.
I use public transport (Melbourne sucks – Mumbai is better) on weekdays but drive quite frequently on the weekends.
Several years ago a well known professor – Dinesh Mohan from IIT Delhi – made a comment regarding public / private transport in India. “travel slowly but comfortably in your own vehicle or travel quickly but in discomfort in public transport”. A good tradeoff in an Indian context.
And to all the hypocrites on SM – shame on you.
Word.
dude, just because our government is idiotic enough to oppose the kyoto protocol does not mean that the average person supports that decision. contrary to bush’s statement that americans are entitled to a life of excess/waste, many americans independently do their part to stem this problem, and would welcome government facilitation.
I’m not an economist but isn’t it wrong to directly convert the cost of the car in INR to USD without facoring some basics. Viz. I am a Programmer Analyst working for a S/W Firm out of India in the US. My Monthly Salary in India is around 35k.(875 USD) As soon as I am transported to the US, my Salary increases to 5400 USD .So for a person with the same amount of experience and expertise in a specialist skill,my pay increases 6 times. I use this ratio for a basis of comparison whenever I compare something in the US vis a vis India. So even if the cost of this car is 1 lac, if I factor this based on my salary in the US, it would convert to 6 lacs or 15000 USDs. I am sure there would be some kind of universal factor that we need to consider based on GDP ,yada yada yada ,unadjusted Metacritic points,yada yada yada before we reach a conclusion.
AK “contrary to bush’s statement that americans are entitled to a life of excess/waste, many americans independently do their part to stem this problem, and would welcome government facilitation”
I don’t know if we are talking about the same country. I wonder how many Americans have stopped driving / drinking coke/ drinking water from a bottle. I have not been there in 3 years – so maybe it is true 😉
The developed world consumes more than the Third World which is perfectly fine. The trouble is when the same First World preaches against consumption in the Third World. Those who live in glass houses ……..
A key reason to migrate is to improve the standard of living i.e to consume more!!!
The Kyoto protocol is quite flawed. Incidentally Australia opposes the Kyoto as well.
An Australian bank advertises – every generation should live better than the last, a fine way to understand the need for a car in India.
Damn I guess it is already mentioned but nevertheless. the car is 1 lakh not some weird number. Another thing, it is for the market to decide whether the car will be sold or not, not some idiot american who thinks that only aspirational value counts.
And finally Rich Nations pollute a lot more than India. Per person the carbon emissions are really large. Let USA reduce it, while poorer nations as they manufacture more would pollute more.
And you want less cars on the road, damn travel by bullock carts. Stop flying but take a sail boat to india.
That doesn’t fix it, you know. Farting cows are a real problem.
melbourne, you are right. also, i think a big part of it is that americans/westerners are either unaware or in denial as to how even small things – like plastics – add to this problem. also, people like my parents, for instance, think it’s too much trouble to make some of these small changes e.g. when i suggested they get the hybrid version of car they have now. i, on the other hand, am too poor to buy a car of my own – but it’s kind of nice to know that a side effect is that i made a small contribution to the environment.
Ak – congrats on living in the USA and not having a car. I tried living in the USA for four months sans a car – drove me nuts 🙂
Not sure if you realize that it takes about seven litres of water to make one litre of Coke. This is a huge debate currently raging in Australia. Many Australian cities have severe water restrictions. In Melbourne we cant wash our car!!
I strongly believe that climate change is a potential catastrophe but the persons who can stop it are the ones in the western world – by consuming less. I dont see it happening in the near future.
There is a lot of recycling in the Third World – possibly more than in the First world. Dharavi is a hotspot for recycling in Mumbai.
re coke – i didn’t know the exact amounts, but i was aware – in kerala, the panchayat of the town housing one of the coke factory’s refused to renew the factory’s license to operate because of the severe depletion of the local water table.
in the developing world, the recycling is more out of financial necessity – but the end result is the same. i wish the US would be more frugal, but we are a wasteful country. but education – of the masses and the corporations – is the only thing that will change it. of course, the financial bottom line is what seems to matter for most people.
i’ve been living in cities since i began college, so public transportation/walking has worked relatively well. in certain cities and in the suburbs, however, this is very difficult.
HERE IS THE CAR! (Scroll down a bit to see it).
Get ready for a few million of those on India’s roads soon.
My buddy Freddie said it best. Hurray to east coast cities with public transport!
and here is the description of the car by Ratan Tata
[link]
ummm….it’s a 1 lac car. 1 lac is approx $2467. duh!
Tata has been talking about the 1 lac car for a few years now…
Oh, and it’s likely that the car will run on cng just like the taxis and rickshaws. Compressed Natural Gas is cleaner than petrol. Even if it’s petrol, I’m sure it will be a Bharat Stage II vehicle. Which means the emissions is controlled. You seem to be looking at the negative aspects, but this type of conveyance is significantly safer than a family of 4 on a scooter at one time. Have you ever been to India? My god.