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Chasing Tata: Automakers on path of Super-Cheap New Cars

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Tata Motor's “one-lakh” Nano, the world's cheapest car, has caused quite a stir.
VW will produce the Up! in two forms, one of them will be ultra-cheap. (Photo: VW)
It's an amazing vehicle due to its price, but also due to the fact that it's tapping into a market that no other brand has ever been able to. At the same time the Nano might not be in for the smoothest ride, particularly since many mainstream automakers want in on the ultra-cheap segment, including Renault-Nissan, Toyota, Fiat and Volkswagen.

Already we know that VW's Up! will be produced in two variants, including a style-driven, gadget-loaded micro car for the first world, and a basic, stripped-out model for developing nations. Toyota is also looking to follow in a similar path. The brand's iQ will bring urban chic to Europe's streets, but having just invested $343 m into a new plant in Bangalore, India, Toyota could be ready to wheel out a much more basic version of the car for local consumption.
Toyota is committing to a new plant in India. A budget version of the new iQ could be built there. (Photo: Toyota)
Neither the Volkswagen Up! nor the iQ will compete directly in terms of price with the Nano, but they will undercut current offerings by a large margin, broadening their respective customer bases.

Meanwhile, the one brand that is trying to target Tata is General Motors, and, not surprisingly, they're tapping into their Chinese partners Wuling Motors for assistance. GM's plan of attack is reportedly similar to Tata's, using basic materials and economies of scale to make a budget vehicle possible. Like the Tata, the vehicle will be made for local markets, abiding by their safety standards - a sign that it won't be marketed to established industrial nations.


 
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