India to Produce $2,400 New Car

Tata Motors announced today that it would start production on new family sedan, which is expected to cost no more than $2,400 at its retail outlets.
The sticker price starts the new vehicle at just under half the price of the next cheapest car in the country, currently being offered by a subsidiary of the Suzuki Motor Corporation.
The revolutionary new vehicle, will also be built in the region of West-Bengal, a rare move in its own right.
According to a company release, Tata Motors has taken major steps a major step in its small car project, by announcing the setting up of its first plant in West Bengal. The plant will be built near the Singur block of a Chandannagar sub-division in the Hooghly district.
Speaking at the announcement, the Chairman of Tata Motors, Mr. Ratan N. Tata, said, “This investment is a reflection of the confidence that the Tata Group has in the investment climate and the Government of West Bengal. We look forward to the opportunity of revitalizing the automotive industry in the state.”
The plant will initially directly employ 2,000 persons, and is expected to create employment in excess of 10,000 jobs amongst the vendors and service providers in the vicinity of the plant. The construction work will commence shortly, and the plant will be commissioned in 2008.
However, in order to slash the sticker price, some reports have indicated that the car may not adhere to new Indian safety standards. Made of much less steel and more plastics, as well as utilizing industrial adhesives as opposed to more costly welding, the new plans have raised the ire of competitors from both a cost and safety standpoints.
In fact, Suzuki’s Chairman has already suggested that a safe, $2,400 car is simply not feasible.
As stated previously, the plant could be a welcome boon for West Bengal, which has yet to attract significant investment. In fact, this would be its first automotive plant. It is widely believed that sluggish investment, is due to the region being governed by the world’s longest serving, democratically elected, communist party.