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FROM NO-NO TO NANO

New Delhi, Jan. 10: Ratan Tata has delivered on a promise he made five years ago: the Tata small car was unveiled at the Auto Expo today — and it will bear a price tag of Rs 1 lakh.

A slight qualification: the sticker price doesn’t include the 12.5 per cent value added tax and the cost of transportation from the plant at Singur, near Calcutta, where it will be built.

Called Nano, the car bears a striking resemblance to the Volkswagen Beetle — Europe’s iconic car of the sixties — and will have a two-cylinder, 623cc aluminium engine in the boot.

“This is an important milestone in our history,” Ratan Tata said in a voice choked with emotion. “This car is a vindication of all that we set out to do.”

The Tata group chairman had announced the small car project at the Geneva Auto Show in 2003 — and had been mocked by carmakers around the world for making such an audacious claim. Today, he took the wraps off the world’s cheapest car.

The car project had started as a serious attempt to find a solution to the hazards that a family of four faced while riding India’s treacherous roads.

“It started with a dream but it wouldn’t have been realised without the effort of the 500 engineers who worked for four years and brought out a product that the world said couldn’t be done,” Tata said.

The high-powered car launch opened to the rousing score titled Thus Spake Zarathustra from Stanley Kubrick’s groundbreaking film 2001: Space Odyssey — and, as in the film, signified the awakening of man’s consciousness to an epochal event.

There was a moment of levity during the launch; Tata said the company had tossed several names for the car that included Buddho (named after Bengal chief minister Buddhadeb Bhattacharjee), Mamata and Despite Mamata before settling for the new-age expression, Nano.

The small car will roll out in the second half of this year. There will be a base model that will be priced at Rs 1 lakh and at least two other models which will have additional features like air conditioning. Power steering will be offered in later versions.

A diesel version of the car will follow which will improve the current mileage of 20km per litre of petrol. “After all, we are known as a maker of diesel cars,” Tata said.

The upper end version will cost a lot more but company officials refused to spell out a price range. “We will announce the prices at the time of launch,” they said.

Although the Rs 1 lakh tag isn’t being offered up as an introductory price, Tata said: “We may not be able to hold the price emotionally. We have to understand that steel and tyre prices — two key products in a car — are rising.”

It’s happened before: in 1982 the Maruti 800 — which was touted as the people’s car then — had been offered at Rs 45,000, but within a year the price had almost doubled. “I bought a Maruti van for Rs 50,000 and drove it around for years,” Tata reminisced.

The carmaker is looking at alternative fuel options and that includes hybrids as well as compressed natural gas.

Tata said: “The toughest part (of creating the car) was continuing to believe that we could do it. There were times when I thought that we might not meet our cost targets, or times when we wouldn’t meet some of our time goals. I thought (at one stage) we wouldn’t be able to make it to the Auto Expo to unveil the car.”

Tata Motors’ managing director Ravi Kant reminded everyone that the Rs 1 lakh car conceived five years ago was totally different from the one that had been unveiled today.

“Let us not forget that the Rs 1 lakh tag was for a car that had no doors. This one has been created in a conventional mode but we have still offered it at the same price.”

Tata said the cost of developing the car was about Rs 1,500 crore, the same amount the company had spent to develop he Indica 10 years ago.

The carmaker used the Maruti 800 as the benchmark for the car: so it is 7.05 per cent shorter in length, but 21 per cent roomier inside because the engine has been placed in the boot.

“With the engine in the back, it will be a different driving experience,” said a motoring expert. “It will be slow round the corners – and people need to watch out for that.”

He said it was a little odd for a carmaker to showcase a production car so far ahead of the rollout. Most carmakers introduce concept cars – and then tweak it to meet commercial considerations.

The company itself isn’t ruling out small changes to the model. “There’s always last-minute engineering that gets done,” Tata said.

But the bigger challenge now is to build the plant at Singur. “The site was flooded sometime ago. We were lucky no equipment was on the site. Construction is on in full swing,” he added.

Tata spent considerable time countering the avalanche of criticism that had been levelled against the car even before it hit the road.

“This project has been dogged by controversy. I am amazed by the number of issues that have been raised – pollution and safety standards -- to explain why our car shouldn’t be in the market,” he said.

He said some of the charges were bizarre: critics had suggested that the mass model would raise petrol consumption in the country – and that would escalate the country’s oil import bill and, eventually, hurt the economy.

There has been growing speculation that Ratan Tata(69) will step down after the launch of the car. “I think everybody has a desire to step aside and do the things that one wants to do. I have a great desire to change gears. But there are some responsibilities that I still need to fulfil and I will then happily step aside,” he added.

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