A recent survey mentioned that the 1-lakh car could capture up to 25% of the two wheeler market. Tata clearly is hoping to replicate the success of the Ace. Though the prospects look good, I am sceptical on the success of the 1-lakh car.The 1-lakh car will be sent to dealers as completely knocked down pieces and assembled by the dealers. To cut costs, the car will not have a metal body but one made of composite material like the Ace. Two engine variants will be on offer, 660cc two cylinder petrol and a 700cc diesel engine. In tests, the petrol version has offered 26kmpl, while the company aims for 30kmpl, which means on road the petrol will offer roughly 24kmpl. This is similar to the fuel efficiency of autos, but significantly better than the Maruti 800. The on road price of the car will be between 1.10 lakh to 1.25 lakh. This significantly lower than the base version of the Maruti 800 which costs Rs 200,000 on road.
The most important issue is will Indians take a liking to the design and lap up the car in large numbers? The likely target audience for this car will be in tier 2 cities especially those buying the commuter class bikes. For them fuel efficiency is of utmost importance for this segment. Apart from that, this segment will also like the car to have a sturdy feel, while also offering the prestige of owning a car.
The composite body of the 1-lakh car will not give the car a sturdy feel. Indians have an inherent liking for metal bodies, even if the vehicle is slower on this count. While the Ace has been tremendously successful, its biggest drawback is its composite driver’s cabin. On Indian driving conditions, even small accidents can lead to the material cracking, and therefore it has to be replaced. If the driver’s cabin had a metal body, then it would only have dents which need not be repaired. This is largely why the large three wheelers from Piaggio, Force and Bajaj are still selling, despite their drawbacks. The car will have a low height clearance, and being a composite body, large potholes on Indian roads can damage the body. The engine is likely to have an output between 20-30 Bhp. This on a 4 seater is miniscule power, and the car is unlikely to be faster than 3-wheelers. The car can seat 2 adults comfortably in the front and two small built adults/children in the rear seats. This design might make the car look like an auto with 4 wheels, which could be a significant drawback for the car.
Buying a car in tier-2 cities is often a status symbol. The 1-lakh car might not exactly fit the bill, as it is might be perceived as a auto with 4 wheels rather than a full fledged car. With Maruti launching its used car dealership, it can give the 1 lakh car a run for its money. An 800 with Maruti warranty might be a better option than an auto on 4 wheels. A used 800 would cost between 80,000-1.25 lakh depending on the car, so it as expensive as the Tata car, but with the Maruti warranty and being a proper car, it might just beat the 1 lakh car.
I thought predict the one lakh car will have limited success in India, but I might be wrong as Tata might be able to make changes to the car and then it can have wider acceptance, similar to the Indica. But I don’t expect it to eat into the commuter class bike market.
