Tata Nano competition

We are living in the era of small urban cars and the small car concept is here to stay, as seen in the list of top ten cheapest cars in the US. But in other countries the concept of a "small car" is quite literal....just see the very small car, the Tata Nano:


And now other car companies are creating competition for the Nano by bringing out more small cars in India.

Business India
Vishal Krishna

With Bajaj, Renault and Nissan signing a joint venture recently to manufacture a small car for $2,500 (Rs 1 lakh), the segment will have its second entrant by 2011. Although we haven’t seen one on the roads yet, there is a lot of exuberance about the small car and its market prospects. The segment has captured the imagination of car makers such as Toyota and Skoda.

For players such as Tata Motors and Bajaj Auto, who also have financing arms combined with wide distribution networks, the small car could be a success story. Analysts say that small, fuel-efficient vehicles are here to stay; especially with crude oil prices hovering above $100 per barrel.

The Nano and it's competiton in the small car market have a huge and growing potential, given that car penetration levels in India is nine vehicles for every 1,000 people and given the growth in economy, people’s aspiration for a better lifestyle, and their changing tastes and preferences.

Analysts also feel that safety standards will vary with the build of the vehicle. In India, where top speed of a smaller vehicle is limited to 140 kmph, the policies related to full frontal car crashes and side impacts will be softer in comparison to that of developed markets. They also point out that pollution norms will not be an issue either as a smaller engine would mean a lesser polluting vehicle and most of these cars will comfortably get a Euro IV or Euro III certification.