In 2008 Tata Motors announced that they would sell a car called the Nano with a retail price of 100,000-rupees ($2,172). If Tata succeeds in being able to get this car to sell in the U.S., it would most likely cost $7,000-$8,000 according to Tata Group chairman Ratan Tata. Mr. Tata mentioned this price point at a symposium at Cornell University, where he attended school. “It won’t be a $2,000 car; it will be a $7,000 or $8,000 car,” said Tata at the event. “But it will still be, in comparative terms, a car that the U.S. would accept.” [New York Times]

Tata will start taking orders shortly for the world’s cheapest car, the Nano.  The car retails for just over $2,000 and will be accessible to people living in India.  The cars will actually begin shipping in July.  Why is the car so cheap?  There is no air conditioning, the steering is manual, the car doesn’t have any airbags, the body of the car is made of sheet-metal and plastic, and the engine is a 624cc two-cylinder.  The car maxes out at about 43MPH.

Tata is hoping that people would rather buy this car than motorcycles.  Tata is believed not to make a profit from these until about 6 years from now.

“I think we are at the gates of offering a new form of transport to the people of India and later, I hope, other markets elsewhere in the world,” stated Ratan Tata, Chairman of the Tata Group.  “I hope it will provide safe, affordable four-wheel transportation to families who till now have not been able to own a car.”

A bigger European version of the car is expected to hit the markets in 2011.  It would be called the Nano Europa and would cost roughly £4,000.

While being able to sell a car at such a low cost is quite a milestone for the Indian conglomerate company, it won’t do much for the overall revenue of the company.  If Tata is somehow able to sell 250,000 Nanos per year, it would add only about 3% of the company’s overall revenues.

[via BBC]