Tata Unveils World's Cheapest Car: $2,500

Last Updated Jan 14, 2008 7:47 PM EST

Is a $2,500 price tag for a new car a good thing or bad?

Earlier today Indian automaker Tata Motors unveiled the Nano (Apple Legal, take note), a $2,500 sub-subcompact that some call a disruptive innovation that could change the way we think about auto transportation.Tata Unveils World's Cheapest Car: $2,500
The car, which Tata refers to as The People's Car (Volkswagen Legal, take note) aims at India's aspirational middle class, who today might be using motorized scooters to get around town.

On a Harvard Business blog, B V Krishnamurthy analyzes the pros and cons of the kookily compelling car. Krishnamurthy is the Director and Executive Vice-President of Alliance Business Academy in Bangalore, India.

On the pro side, the Nano offers affordable, safer transportation (at least compared to scooters) to a new class of workers. If it catches on in other countries, Nano could be a valuable export for India.

Negatives: Nano creates air pollution, adds to India's already nightmarish traffic, and its safety record is unknown.

Would you buy a Nano?

Question to myself: What would the lease price be? $51 per month?
(Photo courtesy Tata)

  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.