Anand Krishna’s musings

It’s finally here. The much awaited “people’s car” from the house of Tatas was unveiled at the New Delhi auto expo a couple of days ago. Initial reactions seem to be quite favourable. The design, the promised mileage/fuel-efficiency, the compliance with safey and environmental norms and of course, the price tag of Rs 1 lakh (INR 100,000 if you are not familar with the word “lakh”) are all incredible. Ratan Tata (and of course, Girish Wagh’s team) has delivered- possibly to the chagrin of several people who expected the Rs 1 lakh car to be no more than an auto-rickshaw.

In a separate piece, I have written about the contribution to traffic jams across the country the “Rs 1 lakh car” will make, and the impact it will have on our fuel import bill, emissions/carbon footprint etc. I do not feel any more reassured on these counts having seen the picture of the Nano or having read various reports. If anything, the prospect of having a 100,000 Nanos on our roads in the next 18-24 months is terrifying. But even so, kudos to Mr Ratan Tata’s vision and perseverence.

Given its fuel efficiency and supposed compliance with Euro IV emission norms etc, I wonder how the Nano would do if it is exported (assuming of course that a dealer and service network are in place and it meets the toughest safety and emission norms). Think of the large number of Indian students or IT professionals who live in the US and Europe. Especially in the US, an automobile is an absolute necessity. Rather than spend $3000-$5000 for a used car that has clocked 100,000 or more miles, would it not make sense to buy a new Nano for close to the same price? Perhaps the Nano, with its 600+cc engine can’t negotiate US expressways as well as that second hand Toyota or Honda can. But for city driving, it may just be what people are looking for. And if I am not wrong, the first Honda cars launched in the US all those years ago were also around 650 cc. Strange coincidence, eh?

For the reasons above (and the fact that India does not have a very well-developed used car market), the Nano might also make a huge dent in the prices of second-hand small cars. A second-hand car has an awful lot of information asymmetry stacked against the buyer in India (or anywhere, I guess). Therefore, why risk a lemon? Be safe with a new Nano.

Think about it…..