India's Tata Motors says it hopes to sell its tiny, ultracheap Nano car in the United States by 2012.
Chairman Ratan Tata hinted as much in March as the car, dubbed the word's cheapest, launched domestically to wide acclaim and 200,000 orders. Though the $2,500 car was not developed with the United States in mind, Tata told the Financial Times that the company would reconsider in the wake of the economic collapse. "In this economic situation, we see perhaps there is a place (for the Nano in the U.S.)," Tata said.
On Wednesday, Tata confirmed plans to develop a version for the U.S. market.
"It will need to meet all emission and crash standards, and so we hope in the next two years we will be offering such a vehicle in the U.S," Ratan Tata told an environmental panel at Cornell University in New York. Company spokesman David Good later confirmed the plans to Automotive News but said "it might be two years and six months."
- Tell us: Would you buy a Nano?
At 10 feet long, the Nano is about 2 feet longer than Smart fortwo but 10 feet shorter than a Chevy Silverado pickup. Its 623-cubic-centimeter, two-cylinder engine is estimated to produce about 35 horsepower, good for a top speed of 75 mph. There's no radio, no air bags, no passenger-side mirror and only one windshield wiper.
A European version of the Nano is expected in 2011. If that car, previewed at the Geneva Auto Show, is any indication, Americans will see a slightly larger, more powerful vehicle beefed up to meet crash standards and cushioned to accommodate local tastes. The Tata in Europe is expected to use a three-cylinder engine, employ air bags and sell for perhaps twice what the simpler Indian model fetches. The U.S. model will cost more, too.
But Tata won't be the first Indian-made vehicles on U.S. streets. Global Vehicles U.S.A. of Atlanta plans to introduce pickups made by Mahindra & Mahindra later this year.
And both would be just part of a wave of foreign car brands newly aimed at American buyers.
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Sale of Saturn opens floodgates
On Friday, auto racing magnate Roger Penske's dealership group reached a deal to snag the Saturn brand from the ruins of General Motors, with plans to use its well-regarded sales experience to offer a variety of foreign nameplates.Key to its success, though, will be the ability to sign on other global manufacturers to make cars for Saturn, giving it a diverse portfolio of vehicles that will sell whether gasoline prices are high or low.
But by opening the door to automakers not now in the U.S., such as France's Renault, Penske could alter the market, allowing smaller automakers to compete against Detroit, Toyota, Nissan and Honda.
Penske said foreign automakers would be key to his business model, but they will have to match GM quality standards before Saturn's 350-dealer network will distribute their products.
"As people around the world look at that, they have the opportunity to tap us on the shoulder and say, 'We have product that we'd like to bring into the U.S.,'" he said.
Penske Automotive already distributes the Smart car.
Lot of deals, but will any succeed?
The deal announced Friday is another example of how the cataclysm that hit Detroit's three carmakers is reshaping the global automotive landscape in profound ways, reducing their worldwide influence and -- if Saturn turns out as Penske envisions -- opening new markets to smaller companies."There's no doubt that the automotive deck chairs are changing," said Michael Robinet, vice president of CSM Worldwide, a Detroit-area auto industry consulting firm. For example:
- Italy's Fiat is waiting for U.S. courts to approve its acquisition of Chrysler assets.
- GM's German subsidiary Adam Opel may be turned over to Canadian auto parts company Magna International, with Russian financing.
- Hummer may be going Chinese, although state media there reported Saturday that the deal has hit regulatory hurdles.
- Tata purchased Jaguar and Land Rover from Ford last year.
Yet industry experts are doubtful that the flurry of mergers and alliances will be any more durable than failed marriages of the past, proving to be just one big distraction from the underlying issue that made them so vulnerable in the first place: making more cars than people can buy.
For years, the U.S. auto manufacturing base has been too large for the market, forcing automakers to overproduce to keep plants running and flooding the market with vehicles. As a result, the Detroit Three especially have been forced to discount vehicles to sell burgeoning inventories.
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A car for the peopleThe Nano was designed to bring motoring to India's masses. A more elaborate, and expensive, model will be produced for the US market.
Nearly 70 million cars and light trucks were produced worldwide in 2007, according to the latest figures available from the International Organization of Motor Vehicle Manufacturers.
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