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Fresh Tata salvo at small car rivals

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  • Published 6.03.07

Mumbai/Geneva, March 6: Tata group chairman Ratan Tata today hit out at competitors, saying they would come in the way of the group coming up with a car priced below Rs 1 lakh even if the government offered special incentives.

Talking to visiting Indian journalists at the Geneva Auto Show, Tata declined to name the competitors but qualified these rivals as “everybody who is parochial and wants to protect their product”.

Tata, who had earlier blamed rivals for fuelling the political controversy over the group’s small-car project at Singur, said, “Even if the government were to think of giving special incentives for small cars, competitors will make sure that did not happen to us.”

Tata was responding to a query if the car could be priced below Rs 1 lakh with government support.

Even though he hasn’t named the competitor, Tata’s latest jab signals the escalating battle between the Tatas and Maruti Udyog, which is now under the control of Suzuki Motor of Japan.

When Maruti Udyog was launched in 1982, it was a government-run company and had wrested fiscal incentives to drive up sales of its Maruti 800 and imperilled the fortunes of the Ambassador and the Premier Padmini.

Now, the Tatas could use the same argument to push for special tax breaks on the ground that its low-cost car has been entirely designed by Indian engineers.

Tata said group company Tata Motors was aware of the objections that competitors could raise and that was the reason why the company had developed a proper car and not a four-wheeler with two or three-wheeler standards.

Tata Motors is busy putting production machinery in place for the proposed Rs 1,000-crore project to bring out the ‘people’s car’ at a price of Rs 1 lakh.

Ratan Tata said the company would hold on to the tag of Rs 1 lakh for the small car, which would bring about a “paradigm shift in transportation in India”.

“The small car can take customers away from the two-wheeler segment and at the same time move people from the low-end four-wheelers,” Tata said.

He, however, said rising prices of steel and tyres along with rupee fluctuation were a major concern.

Tata said the car, which is slated to be launched in 2008, is likely to be powered by a 600cc engine with steel body, dropping the earlier plans of making it by plastics. The base model will be devoid of air conditioning.

Elegante unveiled

Tata Motors today unveiled its concept car ‘Elegante’ and plans to launch a variant of the Indica and sedan Indigo with designs taken from the new platform for moving up to the bigger segment.

“The concept car that we are showcasing here would probably meet the design queries of our new models which will go into production from next year and the next to follow,” Ratan Tata said.

He said the company was at a fairly advanced stage of development of a new Indica.