Tata Motors readies its Rs1-lakh car

Designs of Tata Motors' much touted Rs1-lakh car' are ready. Prototypes of the car — which will have four doors and a rear engine with petrol and diesel variants — are being tested at the company's plant in Pune.

According to Ratan Tata the car would create a new paradigm in low-cost personal transport, carve out a new market segment and reach a broader base of the pyramid. Tata hopes that the car will be launched by early 2008.

Analysts say if the commercial production of the car is successful and profitable, then it would change the scenario of the Indian car industry and even more so the motorcycle industry.

Currently the growth of the premium plus mid-size car segment is outstripping the small car segment, which indicates that most carmakers have less to fear from the Tata's Rs1-lakh car than mobike makers. The only exception would be MUL, which would have to watch out for its M800.

According to figures released by the Society of Indian Automobile Manufacturers (SIAM) sales of passenger cars including utility vehicles and multi purpose vehicles stood at 1,061,290 units (1.6 million units) in the previous fiscal, a growth of 17.65 per cent. Against this two-wheeler sales crossed 6 million units — a growth of 15.75 per cent against 6,208,860 units in 2004-05.