Tiny car, huge market

The Tata Nano, India’s $2,000 ‘people’s car,’ makes its commercial debut today. It’s been a little over a year since plans for the ultra-cheap car were initially unveiled by Tata Motors, and in that time much has changed in the auto industry. Experts say now more than ever, the tiny car offers some valuable lessons for Detroit. The Nano isn’t about building market share (which most car makers obsess over), it’s about creating an entirely new market. Tata also came up with a new supply and manufacturing system, that doesn’t rely on large, complex  assembly  plants (parts are shipped to local businesses instead). There are huge risks here, but it is a bold shot at cracking wide open untapped emerging markets. Down the road, it could be a huge threat to the old giants like G.M.

BusinessWeek