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World's Cheapest Indian Car

Do you guys remember the 2500 dollar car from Tata? It was called the Nano, and in theory it was supposed to offer – especially to Indians – the chance to own a bike with a roof and four seats. It didn't look anything spectacular and it was obvious that a stronger gust of wind could easily become a tornado from the tiny Nano's cockpit but, BUT, it was probably the cheapest car ever made.

Every specialist out there immediately jumped to explain us how bad and unsafe the Nano will be, that the EU won't even approve its import in Europe, etcetera, etcetera. Meanwhile, the Indians from Tata are selling some little pieces of paper which technically reserve you an order number for the Nano and they cost six dollars each. They might have even surpassed 300,000 "pieces of paper" sold until now. Without even launching a car for sale. Even more, they're hoping to sell at least a million of such "pieces of paper", enlisting you to become the happy owner of a... seven-year credit, which is apparently enough time to pay for the 2500-3000 bucks four-wheeled wonder car...

You can pretty much get what the deal is in India if people are pre-ordering a car which costs a minimum $2500 using a 6-dollar paper that technically forces them to get a... seven-year credit with 10% interest. Beside the fact they're going to cover almost twice what the car costs in seven years, the random Indian's willingness to have his own car is at least mildly touching.

Meanwhile, the Germans from Volkswagen were apparently silently building a little car factory in the great India where they too will manufacture a minicar, which will compete with the Peugeot 107, Citroen C1 and Toyota Aygo lilliputian trio. That minicar will most likely be - no matter how we put it – a bit more technologically advanced than the now famous Nano.

The main difference might consist in the fact that while the Nano will sell for about US $2500-3000, the tiny Volkswagen up! will start somewhere in the vicinity of US $12500. And the way we know Volkswagen people, if you're going to want an ashtray, lighter and other "luxury features", the final price will jump by a few grands...

While Tata is thinking how to manage their "success" and calculate future profits, Volkswagen already knows it will sell somewhere around 1.5 million annual units of the thing (that's how they calculate, using millions). They also know that what money is Porsche making now will look like change compared to their own profit if all things go well.

And you know why? Because apparently Volkswagen will only spend no more and no less than 900 lousy euros to manufacture a single up! in their Indian car plant. Yes, you've read that correctly! According to a report by Autocar, Volkswagen only needs around 1200 US dollars for a single up! to leave its factory gates. It's obvious that other costs (R&D, design, testing, marketing, etc) will add up (pun intended), but as far as production costs go, they're not getting any cheaper.

Now you know why the car will be called up! Because that's where Volkswagen's profit numbers will go after launching this model. You see, while Tata wants to sell a modest four-wheeled bike with a roof for 2500 USD, Volkswagen will build a somewhat better car for only half of that sum, but it will sell it for ten times its production cost.

Germany versus India 1-0 (in the overtime).


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