The Tata Nano: How A $3000 Car Becomes A $10,000 Car In The US

Tata NanoLast month the Chairman of Tata Motors, Ratan Tata, revealed that the company will be bringing their unique-looking little car to the US market. Planned launch: 2015

The Tata Nano, at approximately $3000, is currently considered the cheapest car in the world. But when it hits the US it will cost closer to $10,000.

So how does a $3000 car end up costing $10,000 when it comes to the US?

Among the issues Tato faces in making a cheap car in the US—and there are plenty of them—is the safety question. Vehicles sold in the U.S. market are subject to tough safety standards and testing.

The record

In its early days, at least one of the original Tata Nanos exploded in flames on the streets of Mumbai, and there were reports of smoke in others. However, the automaker seems to have solved those problems. Sales is the biggest hurdle the company is currently facing. Even in its native country, the Tato Nano hasn’t come anywhere close to meeting sales expectations.

In its current configuration, the Tato Nano lacks many of the safety features that are standard and required in U.S. vehicles, like airbags, traction/stability control, and two side-view mirrors. Other additional requirements for success in the U.S. market would be power steering, emissions controls, and a more powerful engine. Speed tops out at 37 mph in the original Indian version.

Two things are obvious. First, Tata has a lot of work to do to bring the Nano up to U.S. standards. Second, such changes will most definitely push the car’s sticker price way over $3,000.

Still a bargain?

Industry leaders and sources within Tato estimate that with all the engineering changes they’ll have to make to the Nano, its price will fall just under $10,000. The company initially said that they hoped to price it in the $8,000 range.

Currently the Nissan Versa is the least expensive car available in the U.S. Its base model goes for around $11,990, so if the Tato Nano can hit the $10,000 mark, it will claim the honor of being the least expensive car in America.

The Nano will go up against some pretty stiff competition in the ultra-small car market, including vehicles like the Smart Fortwo and the Mini Cooper. Tata executives hope that the car’s diminutive price tag will help to capture sales; however, the company lacks a North American retail network.

If you aren’t an industry insider, you may be thinking that poor Tato doesn’t stand a chance. After all, how can an Indian company that produces low-quality, low-cost, cars ever make a vehicle of sufficient quality to catch on with American drivers?

Well, I’m sure you have heard of Land Rover and Jaguar. Tato owns those automakers, and they enjoy a pretty substantial cachet in the auto industry. If Tato can leverage those brands to first establish itself in Europe, it might be able to make the hop across the pond and find some success on U.S. soil. Fiat is in a somewhat similar situation right now; although, the Fiat brand is nothing new to American consumers.

Once the safety issues are resolved and the car hits U.S. showrooms, would you consider a Tato Nano for your next car? Let us know what you think of it in the comments section below.

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