4-Wheel Dreams for Millions of Drivers in India - NYTimes.com

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4-Wheel Dreams for Millions of Drivers in India

NEW DELHI — Six years after the idea was hatched, India ’s much-hyped $2,500 Tata Nano was unveiled on Monday. The supercheap compact car, aimed at the developing world’s millions of motorcycle owners with four-wheel dreams, arrived trailing dark clouds, as Tata Motors struggles with production problems and a huge debt load.

But as the global economy withers and automakers bleed cash and cut employees, global warming continues and oil prices creep back up, even rivals say that tiny, wallet-friendly, fuel-efficient cars like the Nano might be where demand grows around the world.

“We’re quite confident there is going to be huge market for that segment,” said Ashish Sinharoy, a vice president at Renault India. Renault and Nissan have partnered with Bajaj Auto, an Indian scooter maker, to introduce a small, cheap car of their own, due out in 2011.

Automakers and car enthusiasts will be following the Nano closely, looking for flaws and gauging consumer reaction. Projects like the Renault-Bajaj alliance, and other cheap small cars plans from manufacturers including Honda and Hyundai might be scrapped if the Nano fails. J. D. Power & Associates predicts that Tata will sell 35,000 Nanos this year, because of production constraints. The car is expected to go on sale next month.

Questions linger about Tata’s ability to keep costs down and get production up, and about the safety and reliability of the Nano. Meanwhile, several auto analysts say that Tata, which had its first quarterly loss in seven years at the end of January, has been forced to delay payments to its vendors because of a cash squeeze. Indian auto suppliers are not in straits as dire as their peers in America and Europe, where many teeter on the edge of bankruptcy, but ...

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http://www.nytimes.com/2009/03/24/business/worldbusiness/24auto.html?_r=1&partner=rss&emc=rss

http://www.nytimes.com/2009/03/24/business/worldbusiness/24auto.html?_r=1&partner=rss&emc=rss