Tata Motors $2,500 car coming in January

Poised to purchase Jaguar and Land Rover, the Indian conglomerate Tata Motors is also eyeing a very different segment of the car market. Previous reports had placed the price of Tata’s ‘1 lakh car‘ around $2,200, but reports today indicate the price will be closer to $2,500. The small, inexpensive car - the least expensive in the world - will be unveiled on January 10th, 2008 at the New Delhi Auto Expo.

Although analysts think a rise in raw materials costs may push the price closer to $3,000, Tata has promised to sell the car for 100,000 rupees, or $2,500, reports Automotive News. Either way, the car will be the least expensive on offer anywhere in the world. Renault/Nissan and India’s Bajaj Auto are also looking into building a car that would compete with Tata’s. Their price target is $3,000.

GM is also reportedly developing a low-cost global car, although their idea of low-cost is more along the lines of Renault’s $10,000 Logan. Although the inexpensive Tata is a ground-breaker in terms of affordability, it will likely be diminutive, underpowered by European and American standards and would also likely have a tough time passing safety certification. But that misses the point of the new ‘people’s car’ - providing affordable mobility to the masses opens a whole new world of opportunity. Tata currently produces the Indica (pictured) among others, which it also exports. If demand for the $2,500 car proves high enough, Tata could use its existing network to distribute it to developing nations as well.

Such egalitarian thought and action in the realm of automobiles is rare, and only time will tell how well it sits with Jaguar and Land Rover owners should Tata win the bidding for the two luxury marques. On the other hand, Mercedes-Benz provides both extreme high-end luxury and performance vehicles and at the same time backs the Smart line, which provide affordable and ecological transportation. So maybe it’s not such a crazy thought that Tata should do the same.