World's cheapest car is launched

The Tata Nano, the world's cheapest car, is being launched in India.

• Costing just 100,000 rupees ($1,979; £1,366), the Nano is being launched in Mumbai later, before going on sale across India over the next 10 days.
• Tata hopes the 10 feet (3 metre) long, five-seater car will be cheap enough to encourage millions of Indians to trade up from their motorcycles.
• Car industry analysts estimate it will take five or six years for Tata to start to make a profit from the Nano.
• The four-door Nano has a 33bhp, 624cc engine at the rear.
• The basic model has no airbags, air conditioning, radio, or power steering. However, more luxurious versions will be available.
• A slightly bigger European version, the Nano Europa is due to follow in 2011, and is expected to cost nearer to £4,000.
• Analysts said that if the car proves an immediate hit in its home market, Tata may struggle to meet demand.
• This is because the main Nano factory in the western state of Gujarat, which will be able to build 250,000 cars a year, is not due to open until next year.
• In the meantime, Tata will only be able to build about 50,000 Nanos at its existing plants.
• The delay happened when Tata had to abandon plans to build the Nano in a new plant in the eastern state of West Bengal due to a row over land acquired from farmers.
• This caused the launch of the Nano to be put back by six months.
• Tata’s managing director Ravi Kant said that bookings for the car will start on 9 April, and that a ballot will then select the first 100,000 people to get their Nano.
• Deliveries will then begin from July.
• Tata owner Ratan Tata has described the launch as a milestone.
• “I think we are at the gates of offering a new form of transport to the people of India and later, I hope, other markets elsewhere in the world,” he said.
• Even if Tata can sell 250,000 models a year, it will add only 3% to the firm’s revenues, says Vaishali Jajoo, auto analyst at Mumbai’s Angel Broking.
• “That doesn’t make a significant difference to the top line,” he said.
• “And for the bottom line, it will take five to six years to break even.”
• Yet with seven million motorcycles sold last year in India, Tata is eying a huge marketplace for the Nano.
• Like almost all global carmakers, Tata has seen sales fall as the global economic downturn has continued.
• The firm made a 2.63bn rupees loss for three months between October and December.
• In addition, Tata is struggling to refinance the remaining £2bn of its £3bn loan it took out to buy the Jaguar and Land Rover brands from Ford in June of last year.