Update 2: Rs1-lakh car to be a profitable proposition: Ratan Tata

New Delhi: In a media interaction after the tumultuous launch of what has been dubbed as the " the Rs1 lakh car" and "People's car", Tata Group chairman Ratan Tata said that while he was relieved that the Nano had finally been launched, the challenge for the company had only just begun.

Significantly, the base version of the car has a dealer price tag of Rs 100,000. This version will not have an AC or any other frills. Combined with a VAT of 12 per cent the on-road price of the car is likely to be between Rs 115,000 and Rs 120,000.(See: Update 1: Tata Motors' Nano likely to have on-road price of Rs115,000
 
Not revealing the development cost of the car Tata emphasised that the Nano would be a profitable venture for the company.
 
Asked whether the company would raise the price of the car later, he said, 'The Rs 1 lakh car,' was a creation of the media and added that only later did he take up the challenge to launch a car at the Rs 1 lakh price point. He specified that Tata Motors had never claimed that the price of the car could not be raised beyond Rs1 lakh.

According to Tata Group executives, the Nano has 100 vendors for the Nano project notable among them being Robert Bosch India offering the fuel injection equipment. The company has also filed 34 patents for the car.

Tata Motors is finalising the Nano's distribution strategy and for the next two or three years the focus of the company is likely to be on the Indian market. The company has also not yet decided on its strategy as to whether it will set up manufacturing units for the car in other countries or whether it would go through the export route.
 
"The inspiration for launching such a product came when I observed families riding on two-wheelers, the father driving the scooter, his young kid standing in front of him, his wife sitting behind holding a little baby," Tata said. "It led me to wonder whether one could conceive of a safe, affordable, all-weather transport for such a family."

Thus the Nano is likely to be on Indian roads in the latter half of 2008. The company is targeting sales of half a million cars each year. The delay, according to Tata, was due to flooding at the Singur plant in West Bengal, the main manufacturing site of the car.

Answering a question as to whether the Nano would be an eco-friendly car he said though Tata Motors had never claimed to offer an eco-friendly car, the Nano was Bharat III-  and Euro IV-compliant.

Showing his gratitude to the West Bengal government for extending full support to Tata Motors to make the Nano project a reality, he said, "We chose to set up the project in West Bengal even though we were being wooed by innumerable other states, because we felt that West Bengal needed a project that would provide large scale employment and other benefits required by it."