The Telegraph
Since 1st March, 1999
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Tatas face 1-lakh test

New Delhi, Sept. 5: The Tata small car, which is expected to roll out of the Singur plant in the middle of next year, may not carry a price tag of Rs 1 lakh after all.

Tata Motors signalled for the first time today that it was facing a challenge to cap costs and ensure that Ratan Tata’s dream car would carry the promised price tag.

“Higher input cost has made it more challenging to maintain price at the Rs 1 lakh level, but whether we will launch the car at a higher price or not will be evident only when we introduce the product,” Ravi Kant, managing director of Tata Motors, said on the sidelines of a conference.

Industry sources said the car would probably sport a 660-cc engine with a horse power of 30 to 33. It will offer both diesel and petrol engine options. German Tier One component major Bosch is developing “a brand new” common rail direct injection (CRDi) solution that will be compatible with the Tata model.

According to vendor sources, the Tata small car will have its engine in the boot like the Volkswagen Beetle, the German people’s car of yesteryear. It will have four doors and four seats.

But it had not been envisioned this way. Last month, in an interview with BusinessWeek, Ratan Tata said: “I had hoped in design it would be totally unconventional…. I was disappointed we used conventional materials like steel, not plastic. In fact, General Electric was also very keen that we develop a plastic car. But the cost of plastic was more than steel, so it became a conventional material car….

“In the early thinking, the car had no doors… Then we realised that people weren’t going to consider that to be a car but some other animal. We realised we need doors and a roll-up window.”

It is learnt that the strip-down base variant will not offer air-conditioning or power steering. The prototype is ready and may premier at the Auto Expo next January.

Tata Motors reported a 5 per cent decline in passenger vehicle sales in August. Kant said demand had been hit mainly by a rise in interest rates, which had made car loans more expensive.

Overseas sales have been hit by the strengthening rupee, he added. “It’s a double whammy,” he said.

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