India To Roll Out World's Cheapest Car At $2,500

Mumbai, India (AHN) - India is bound to set a world record for selling the cheapest brand new car in the world when it rolls out the $2,500 Tata model on Thursday.

Daryl Rolley, head of the North American and Asian operations for Ariba, predicts Tata will turn upside-down the whole global auto industry in the next 5 to 10 years. Ariba provides parts for Tata Motors of India and industry giants like BMW and Toyota.

"It's basically throwing out everything the auto industry had thought about cost structures in the past and taking out a clean sheet of paper and asking, 'What's possible?'", Rolley told the International Herald Tribune.

To cut down on costs, the guiding philosophy of the Tata was: Do we really need that? The prototype to be unveiled Thursday lacks a radio, power steering, power windows, air conditioning and has one windshield wiper. It uses an analog speedometer.

Tata has a rear-mounted engine, a tiny trunk and plastics and adhesives in lieu of metals and bolts. The four-door, five-seater hatchback looks like a jellybean. The broad rear portion and narrow front reduces wind resistance, allowing the use of a cheaper engine.

Ratan Tata, chairman of the Tata Group, admits the Indian vehicle may not pass western emission test, not even a crash test. But it will provide an alternative for millions of Indians whose lives are at a greater risk using public transportation.

"If what we're talking about in India is people having the option of getting off the streets, from motorcycles and bicycles where they are at risk from bigger vehicles, this may actually be an improvement of the safety environment," Tata said.

To market Tata, the manufacturer requires its dealers to have a showroom for Indian towns that have a population of at least 100,000. It targets a growth of number of dealers from 170 to 300 next year and 500 by 2009.