Cheap cars allow Indians to jump off motorcycles

MUMBAI, June 24, 2007 (AFP) – Trading a motorcycle for a car in India has long been too expensive for many, but manufacturers plan to offer models at 3,000 dollars or less to attract new buyers, analysts say. The push by Nissan Renault, Tata Motors and Global Automobiles — a subsidiary of the Kolkata-based Xenitis group and China’s Guangzhou Motors — comes as car sales in India fell in April and May to a combined 1.52 million from 1.6 million a year earlier.

It was the first back-to-back monthly decline in three years, a period of annual double-digit growth.

But a new sales strategy is about to be unleashed.

“Tata’s small car is likely to be the first one to roll out,” said Ashutosh Goel, an auto analyst with brokerage Edelweiss Capital.

“They have a firmed up model design and on-going plant construction.”

The much-awaited model could be priced between 100,000 to 125,000 rupees (2,457 to 3,017 dollars) and arrive by 2008 from its Singur plant in the communist-run state of West Bengal.

“The management has indicated that a prototype of the small car is ready. It could be a four-seater with an engine capacity of 630cc,” added Ajay Shethia, an analyst with brokerage firm Enam Sec