India is seeing loads of new small cars despite of downfall in overall car market. Though the sales is increasing but rate is down a little bit.
Every car manufacturer now seems to have keen eye on Small car segment be it Chevrolet, Toyota, Ford or GM. In 2003 Tata announced their most aspiring project and called it Rs. One Lakh Car.
It is one of the most happening even in car market though also a issue of prestige for TATA too. Tata has really a nice history in the world of Business.
Be it from recent acquisition of 10 time bigger company or be it power project, even SALT.. we all know TATA ka Namak.
This 1 Lac car project seems to be a tough deal for TATA now and TATA had to face a number of problems too because of same. Tata had plan to start plant for small car at West Bengal and Uttarakhand, things went fine in Uttarakhand but in West Bengal, Tata had to abandon as people did not want them to start working there. Though it is not that big problem for a company like TATA.
Main task against TATA is the future of this 1 lac car. When it was announced there were many people to doubt upon it and still doubt but the small car had been successful to drive interest of people from last 4 years.
No one has yet seen this car apart of Project People, also TATA has plan to implement decentralized or we can call ie distributed assembly line for this small car. What does this all means..
It means that TATA will provide parts of cars to local vendors and they will assemble it at their own places.
TATA I think believe in Mass production and low margin ie. have
Uptill now Company has invested Rs. 1800 crore on car with Rs. 600 crore for vendors. Company really has to work big in order to achieve profit from this CAR. Small car market is already saturated but giving 10 lack car a year may also cause other issue that where they will get accumulated ? Anyways..
profit from Mass production than having high profit on low production.
Also, the one lakh car is not going to be 1 lakh car anymore but should be less than 1. 5 lakh. If it happens then you will sure see depreciation in price of current Small car king ie. Maruti 800.
It is expected to see it on next Delhi auto expo, lets see what will be its future.