While the debate rages on whether Apples iPhone (with due apologies to Cisco) will revolutionise the mobile phone industry, back in India speculations are on about a project code-named Project X3, otherwise known as Tata’s 1-lakh people’s car – on how it will look like, on whether it will actually cost 1 lakh and whether they will be able to deliver the product in the first place.

Tata's 1 Lakh Car

 

The doubters include Suzuki (who has reportedly unveiled a secret plan to counter Tata’s challenge) and Bajaj(also planning a foray into four wheelers) who finds the price tag of 1 lakh commercially non-feasible. Even the most optimistic in the car industry thinks the 1 lakh price tag may not be realistic and the actual cost may be close to 1.5 lakhs. Even then the ‘people’s car’ will be a formidable entry into the Indian auto-market and if marketed properly can capture a considerable market share.

What is Tata’s strategy in making this work? In his interview with Business World, Mr Ratan Tata reveals that a broad framework is in place but the rest is still being finalized. While you do your math here are some facts about Project X3.

  • The People’s car is going to be gearless unlike the car being developed by Suzuki
  • It will be bigger than Maruti 800, but also lighter with a rear engine and will seat 5 people.
  • Although Tata claims it will meet the safety requirements in India and most other developing nations where the car is likely to have a market, this is a major concern especially on the Indian roads. Comparatively, they will have an easier time meeting the emission standards.
  • The target market is likely to be the lower middle-class Indian family. “We want to move people from a two-wheeler, with a wife holding a kid, to a safer form of transportation.” says Mr. Ratan Tata.
  • The car will come in two or three levels – the lowest level being priced closest to the 1 lakh mark – which the Tata calls the ‘rudimentary’ model, the other word for something that moves and has four wheels and nothing else. The challenge Tata has is to make this appealing enough for the consumers.
  • The buyer will have the option to upgrade to a higher model or models which if the car is good enough will eat into the Maruti 800/Alto market share apart from the two-wheelers.
  • The Singur small car plant is the first major step in realising the project.
  • Even the car’s success is not entirely good knews for India’s non-existent traffic system and could make the energy hungry India to a deeper crisis. Maybe Tata’s R&D team missed out an opportunity in failing to come up with an eco-friendly option which would have had a huge impact.

The car is likely to be in the market in less than 2 years from now. Tata has its task cut out in terms of marketing. The scenario has changed from a market where people drove bulky ambassadors and had no idea of the range of cars available in the foreign market to the present, when even the least demanding consumer has some level of expectation.

Having said that, who knows, maybe the day is not too far away when your milkman is going to deliver milk to your house on his way to drop his kids to school.