The Light Is Green: Toyota enters Nano Wars

May 13, 2008

Toyota enters Nano Wars

Tata Nano India's premier carmaker, Tata Motors, rocked the automotive world when they finally released their anticipated Nano, alternatively known as the "People's Car", "One-Lakh Car" and "$2,500 Car".

Kudos to Tata for building up expectations over the past five years (they announced this project back in 2003) and then coming through on their promise.

The initial reply from other major manufacturers such as GM and Toyota was that the Nano could not be profitable (Tata says it is), and that the car could not meet safety and emissions standards (it currently does in lax India which is Tata's first intended market).

Now both GM and Toyota are scrambling to reply with product.

Basically what What Tata did was signal their intention of dominating the entry-level segment in India, where a potentially huge emerging middle class looks to buy their first automobile.

Toyota moving forward logo Toyota has announced plans to begin building small cars in India, for the local and export markets. They will build a second plant to be ready by 2010, at a cost of $350 million dollars and with an output of 100,000 units per year, through their joint-venture in Bangalore.

Toyota President Katsuaki Watanabe has been quoted by the Times of India as saying, "There is a huge market for low-cost/price vehicles," but at the same time has expressed concern about Toyota's ability to maintain a high level of quality.