It’s the latest and hottest segment in the car market, globally. Ever since the unveiling of the Tata Nano—and the hysterical response it triggered off in India and overseas—the ultra low cost car is right on top of the automotive mind-space . So much so that analysts and experts attending the Detroit auto show just after the Delhi Auto Expo were amazed to see that the car that made the most news there was the one that wasn’t even on show — namely the Nano.
So far we know pretty much every scrap of information that is avail-able on the Nano, till the car is officially launched later this year and is available for test-drives . We know that the standard variant — sans airconditioning and power steering—will have an ex-dealer price of Rs 1 lakh (though customers will have to shell out the value added tax and the logistics cost from the factory). That it sports a 623 cc, two-cylinder , MPFI engine with single balancer shart, four-speed manual transmission and top speed of 105 kms per hour. That the powertrain is packed in the rear to increase interior space.
That the four-door , four/five seater car is “8% smaller than the M800 externally but 21% more spacious internally,” according to Tata Mo-tors chairman Ratan Tata. That it meets the frontal crash test norms mandatory in India and has been designed to meet offset and side im-pact crash test norms required overseas as well. That in emission terms, it’s Bharat Stage 3 compatible and that its mileage is 20 km per litre. Vendor sources have already indicated that the air conditioned version is likely to be launched around December, with a 60cc AC. A diesel and hybrid version will also follow.
All of which makes the Nano a terribly exciting product. But that’s not all. What makes the ultra low cost (ULC) trend even more exciting is the number of top MNC carmakers that have indicated that they would be looking at the segment in the near future. Immediately after the launch of the Nano, engineers from Volkswagen and Renault were seen and heard discussing the car’s build, development and styling. Auto industry sources say, top global companies like Volkswagen, Nis-san and Toyota have reportedly sent out to feelers to Indian vendors for their version of a $3000-4000 car. This in addition to the Bajaj-Renault project where feasibility study is already on.
According to vendor sources, the cost benefits of the ULC segment has triggered interest from top names in the global auto business. And given the Tata and Bajaj project, India is being seen as a hub for this segment. At the Detroit Motor Show, top Toyota officials were quoted saying that its an exciting segment and the company would like to take a look at it. Toyota has been mulling a small car for emerging markets which will be sourced mostly from India and its interest in the ULC segment could give Tata Motors some really tough competition particularly since Toyota is extremely efficient at globally procuring for low cost platforms, something it fine-tuned with the Innova project.
As for Volkswagen, a top company official said that the German marque has not firmed up plans for a low-cost car but is looking for high localisation in all cars that will be produced in India. Volkswagen MD (passenger cars) Andreas Prinz said: “We have not finalised any plans for a low-cost car for the Indian market. For us the Polo is the smallest car while UP!, which is in the concept stage, will also debut India sometime in 2010. All these cars will meet the Volkswagen safety standards and even UP!, which is the smallest car from our sta-ble , is expected to be priced around 6000 euros. Any entry below that price band is yet to be considered.”
However, sources say VW, which is setting up its own plant at Chakan near Pune, is seriously looking at the ULC market. Vendors have also indicated that GM sent out feelers though the company says it is not interested in that segment.
The other company that may be considering an ULC foray is Korean major Hyundai. The company had earlier announced plans to venture into the low-cost car market but the global cars it is working on would be priced around $5,000-6 ,000 — double the Nano segment — are scheduled for roll out by 2010. H S Lheem, MD & CEO Hyundai Motor India had earlier said: “We are making a low-cost car which will con-form to global safety standards and emission norms. Our R&D team in Korea is developing the concept for these low-cost cars, which would find their way to the emerging markets including India. We can utilise our manufacturing at Chennai for making low-cost cars in future.”
However latest reports trickling in say that Hyundai may also be looking to join the ULC bandwagon. In a recent interaction with the media , top officials of the company were quoted saying that it is planning a public car that is suitable for India and other eastern coun-tries and that the car will most likely compete with the Tata Nano when it rolls out. However the launch is not going to be immediate because developing a new model takes at least three years.
If and when Hyundai does launch its Nano competitor , it will join the ranks of the Bajaj-Renault-Nissan vehicle. Bajaj showcased a proto-type which will be the basis for the ULC car that the company will de-velop along with Renault and Nissan.
Nissan-Renault boss Carlos Ghosn was the first MNC to join the ultra low cost bandwagon and kicked off partnership talks with Bajaj middle of last year. The two companies are currently conducting feasibility studies on the project. Ghosn has indicated that his $3000 car will be built on a Bajaj platform with an Indian powertrain with design and chassis cues from Renault. “Other than the chassis, body and interiors, the engine, transmission , steering system, brakes and suspension of the final product will be similar to the prototype,” Bajaj Auto MD Ra-jiv Bajaj had said at the unveiling of the prototype at the Auto Expo.
When productionised, the car will give twice the mileage of current B-seg small cars with its gasoline engine. And it will have multiple pow-ertrain options . “We will also have a diesel option and one can always build LPG, CNG and hybrid options on to the platform as well,” Mr Bajaj had said. For diesel, Bosch is “one of the options”.
The interest in the Nano will not only mean more choice for Indian consumers at that price point but also a windfall for vendors who are already associated with the project. Indian vendors for the Nano have already announced that they are looking to leverage their ultra low cost experience globally. Bosch is targetting revenues of 1 billion euro ($1.5 billion) from sub-7000 euro cars by 2010. It also plans to transfer some of its Nano cost learnings to more developed markets. The com-pany is also pitching for more ultra low cost business and is already in talks with Bajaj for its Renault-Nissan small car JV. “We want to capitalise on Nano investment and will compete for more ultra low cost car projects worldwide,” a top official had indicated.
Given that some of the names now looking to invest in the ULC busi-ness already have a huge footprint in India — like Hyundai—or are building sizeable production capacity — like Volkswagen and Ren-ault /Nissan—it is safe to assume any global ULC model will use Indian vendors and engineering expertise. All of which will mean the car will be sourced locally and will remain competitive in terms of pricing. Auto analysts say the MNC competition in that segment is a blessing — it will push the bar up for technology but keep costs down due to competitive pressure.
Which means if you are looking for a $3000 car, all you need to do is wait. Just a bit. The Nano will be the first but it won’t be the only op-tion in the nottoo-distant future.
So far we know pretty much every scrap of information that is avail-able on the Nano, till the car is officially launched later this year and is available for test-drives . We know that the standard variant — sans airconditioning and power steering—will have an ex-dealer price of Rs 1 lakh (though customers will have to shell out the value added tax and the logistics cost from the factory). That it sports a 623 cc, two-cylinder , MPFI engine with single balancer shart, four-speed manual transmission and top speed of 105 kms per hour. That the powertrain is packed in the rear to increase interior space.
That the four-door , four/five seater car is “8% smaller than the M800 externally but 21% more spacious internally,” according to Tata Mo-tors chairman Ratan Tata. That it meets the frontal crash test norms mandatory in India and has been designed to meet offset and side im-pact crash test norms required overseas as well. That in emission terms, it’s Bharat Stage 3 compatible and that its mileage is 20 km per litre. Vendor sources have already indicated that the air conditioned version is likely to be launched around December, with a 60cc AC. A diesel and hybrid version will also follow.
All of which makes the Nano a terribly exciting product. But that’s not all. What makes the ultra low cost (ULC) trend even more exciting is the number of top MNC carmakers that have indicated that they would be looking at the segment in the near future. Immediately after the launch of the Nano, engineers from Volkswagen and Renault were seen and heard discussing the car’s build, development and styling. Auto industry sources say, top global companies like Volkswagen, Nis-san and Toyota have reportedly sent out to feelers to Indian vendors for their version of a $3000-4000 car. This in addition to the Bajaj-Renault project where feasibility study is already on.
According to vendor sources, the cost benefits of the ULC segment has triggered interest from top names in the global auto business. And given the Tata and Bajaj project, India is being seen as a hub for this segment. At the Detroit Motor Show, top Toyota officials were quoted saying that its an exciting segment and the company would like to take a look at it. Toyota has been mulling a small car for emerging markets which will be sourced mostly from India and its interest in the ULC segment could give Tata Motors some really tough competition particularly since Toyota is extremely efficient at globally procuring for low cost platforms, something it fine-tuned with the Innova project.
As for Volkswagen, a top company official said that the German marque has not firmed up plans for a low-cost car but is looking for high localisation in all cars that will be produced in India. Volkswagen MD (passenger cars) Andreas Prinz said: “We have not finalised any plans for a low-cost car for the Indian market. For us the Polo is the smallest car while UP!, which is in the concept stage, will also debut India sometime in 2010. All these cars will meet the Volkswagen safety standards and even UP!, which is the smallest car from our sta-ble , is expected to be priced around 6000 euros. Any entry below that price band is yet to be considered.”
However, sources say VW, which is setting up its own plant at Chakan near Pune, is seriously looking at the ULC market. Vendors have also indicated that GM sent out feelers though the company says it is not interested in that segment.
The other company that may be considering an ULC foray is Korean major Hyundai. The company had earlier announced plans to venture into the low-cost car market but the global cars it is working on would be priced around $5,000-6 ,000 — double the Nano segment — are scheduled for roll out by 2010. H S Lheem, MD & CEO Hyundai Motor India had earlier said: “We are making a low-cost car which will con-form to global safety standards and emission norms. Our R&D team in Korea is developing the concept for these low-cost cars, which would find their way to the emerging markets including India. We can utilise our manufacturing at Chennai for making low-cost cars in future.”
However latest reports trickling in say that Hyundai may also be looking to join the ULC bandwagon. In a recent interaction with the media , top officials of the company were quoted saying that it is planning a public car that is suitable for India and other eastern coun-tries and that the car will most likely compete with the Tata Nano when it rolls out. However the launch is not going to be immediate because developing a new model takes at least three years.
If and when Hyundai does launch its Nano competitor , it will join the ranks of the Bajaj-Renault-Nissan vehicle. Bajaj showcased a proto-type which will be the basis for the ULC car that the company will de-velop along with Renault and Nissan.
Nissan-Renault boss Carlos Ghosn was the first MNC to join the ultra low cost bandwagon and kicked off partnership talks with Bajaj middle of last year. The two companies are currently conducting feasibility studies on the project. Ghosn has indicated that his $3000 car will be built on a Bajaj platform with an Indian powertrain with design and chassis cues from Renault. “Other than the chassis, body and interiors, the engine, transmission , steering system, brakes and suspension of the final product will be similar to the prototype,” Bajaj Auto MD Ra-jiv Bajaj had said at the unveiling of the prototype at the Auto Expo.
When productionised, the car will give twice the mileage of current B-seg small cars with its gasoline engine. And it will have multiple pow-ertrain options . “We will also have a diesel option and one can always build LPG, CNG and hybrid options on to the platform as well,” Mr Bajaj had said. For diesel, Bosch is “one of the options”.
The interest in the Nano will not only mean more choice for Indian consumers at that price point but also a windfall for vendors who are already associated with the project. Indian vendors for the Nano have already announced that they are looking to leverage their ultra low cost experience globally. Bosch is targetting revenues of 1 billion euro ($1.5 billion) from sub-7000 euro cars by 2010. It also plans to transfer some of its Nano cost learnings to more developed markets. The com-pany is also pitching for more ultra low cost business and is already in talks with Bajaj for its Renault-Nissan small car JV. “We want to capitalise on Nano investment and will compete for more ultra low cost car projects worldwide,” a top official had indicated.
Given that some of the names now looking to invest in the ULC busi-ness already have a huge footprint in India — like Hyundai—or are building sizeable production capacity — like Volkswagen and Ren-ault /Nissan—it is safe to assume any global ULC model will use Indian vendors and engineering expertise. All of which will mean the car will be sourced locally and will remain competitive in terms of pricing. Auto analysts say the MNC competition in that segment is a blessing — it will push the bar up for technology but keep costs down due to competitive pressure.
Which means if you are looking for a $3000 car, all you need to do is wait. Just a bit. The Nano will be the first but it won’t be the only op-tion in the nottoo-distant future.
Source: Economic Times
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