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Tata unveils “People’s Car” which will sell for just $2,600

Ratan Tata, chairman of India’s sprawling Tata Group, will tomorrow pull the covers off a car that is dividing his country. The “People’s Car”, expected to sell for as little as $2,600 when it reaches showrooms in September, is stirring nationalistic pride in India’s business community - but it is also causing environmentalists sleepless nights.

Meanwhile, for a government determined to kickstart slow-moving industrialisation and generate sorely-needed jobs for surplus rural labour, the People’s Car has taken on a broader significance, symbolising India’s determination not to cede the mantle of manufacturing excellence to China.

Manmohan Singh, India’s prime minister, last year launched a national “automotive mission plan” to make the country the global destination of choice for the design and production of cars and car parts. The plan targets annual sector sales of $145bn (€98bn, £73bn) and the creation of 25m jobs in India by 2016.

Car culture is already alive and well in India. More than 1,200 exhibitors have taken space at the week-long Delhi car show, which opens with tomorrow’s unveiling of the People’s Car. Indian industrialists say that if they do not tap the new middle-class market - set to expand from 50m today to 583m in 2025, according to McKinsey - then their Chinese and western rivals will. Roland Berger, the consulting firm, estimates that by 2010 an additional 30m households will be able to buy a car.

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