The New York Times notes that Tata's new car is "expected to retail for as little as the equivalent of $2,500, or about the price of the optional DVD player on the Lexus LX 470 sport utility vehicle." How do they do it? Strip it of safety and environmental standards and just about everything else.
India's Tata Group Chairman, Ratan Tata.
It is a whole new way of making cars; the Times writes "Some analysts are predicting that just as the Japanese popularized kanban (just in time) and kaizen (continuous improvement), Indians could export a kind of "Gandhian engineering," combining irreverence for conventional ways of thinking with a frugality born of scarcity.
The model appearing on Thursday has no radio, no power steering, no power windows, no air-conditioning and one windshield wiper instead of two, according to suppliers and Tata's own statements. Bucking prevailing habits, the car lacks a tachometer and uses an analog rather than digital speedometer.
The Times notes that it is not going to be very clean:
Critics of the Tata car have asked how a car that prunes thousands of dollars off regular prices can possibly comply with safety and environmental norms. The answer may be that the car comes at a particular moment in India's development, when the country is affluent enough to support strong demand for automobiles but still less regulated than developed countries.
Michael Walsh, a pollution consultant and former United States Environmental Protection Agency regulator, said that a car so cheap was likely to lack the complex technology to maintain its initial level of emissions and that without such technology cars could soon be producing four to five times their initial pollution level.
"It strikes me as impossible that such a vehicle will be a very clean vehicle over the life of the vehicle," Mr. Walsh said. ::New York Times
Read Christine on All Eyes on India: The Future of Transportation Impacts?