Tata's tiny Nano is big news for Indians

Is this the automotive breakthrough the developing world has been looking for? The car that puts a car within the reach of that large proportion of India's population hitherto unable to afford one?

Tata is already touting its tiny Nano with that most tried and proven of straplines: 'the people's car'. That's a big claim in India, a nation where car ownership still resides out of reach for most of the population.

If the Nano lives up to such claims, it could also prove a major setback for those working to keep a check on climate change and urban congestion -- already out of control in much of India.

Whatever happens, the Nano is big news, mainly by dint of its tiny price tag. In its home market, the Nano will go on sale shortly for $2900. For that you get predictably little: a 623cc two-cylinder rear-mounted engine and a four-speed manual transmission.

Buyers wanting air conditioning, power steering, electric windows and the like will have to move up into costlier deluxe models. Top speed is around 105km/h.

For that huge proportion of India's population currently restricted to tiny, ageing, dangerous motorcycles, however, it's likely to be enough.

And with Tata's claims of low emissions (yet to be expressed numerically in public, it could in time work to the benefit of the atmosphere if it manages to knock enough of those smelly little two-wheelers off the road.

Not everyone, however, finds this to be good news. An equal problem lies with urban congestion, UN climate panel head Rajendra Pachauri told press recently.

"Every car that goes on the road is going to use road space. We're only adding to congestion and increasing pollution," he said.

On another front, the Nano could help its maker out of a serious hole. Tata's timing could hardly have been worse in stumping up more than $3 billion last year for Jaguar Land Rover -- a move that sees the company already in a world of pain in the wake of the global financial crisis, and doubtless headed for more.

Not that the Nano will solve all the company's problems overnight. With dealers already feeling the pressure at the enquiry desk, analysts are expecting demand for the Nano to far exceed current production capacity.

Tata is working as fast as it can to set up its new plant in the state of Gujarat, but that won't be running until late 2010. Which means capacity is initially limited to somewhere between 30,000 and 50,000 cars.

Which in turn means that although Tata has already planned up-spec cars for overseas markets (Europe initially), that won't happen until 2011 at the earliest.